Chapter 18

18.55(6)(e)1.a. a. The aggregate expected debt service and net exchange payments relating to the agreement during the fiscal year in which the trade date occurs will be less than the aggregate expected debt service and net exchange payments relating to the agreement that would be payable during that fiscal year if the agreement is not executed.

18.55(6)(e)1.b. b. The aggregate expected debt service and net exchange payments relating to the agreement in subsequent fiscal years will be greater than the aggregate expected debt service and net exchange payments relating to the agreement that would be payable in those fiscal years if the agreement is not executed.

18.55(6)(e)2. 2. Subdivision 1. shall not apply if either of the following occurs:

18.55(6)(e)2.a. a. The commission receives a determination by the independent financial consulting firm under par. (d) 1. that the terms and conditions of the agreement reflect payments by the state that represent on-market rates as of the trade date for the particular type of agreement.

18.55(6)(e)2.b. b. The commission provides written notice to the joint committee on finance of its intention to enter into an agreement that is reasonably expected to satisfy subd. 1., and the joint committee on finance either approves or disapproves, in writing, the commission’s entering into the agreement within 14 days of receiving the written notice from the commission.

18.55(6)(e)3. 3. This paragraph shall not limit the liability of the state under an agreement if actual contracted net exchange payments in any fiscal year are less than or exceed original expectations.

18.55(6)(f) (f) Semiannually, during any year in which the state is a party to an agreement entered into pursuant to par. (a), the department of administration shall submit a report to the commission and to the cochairpersons of the joint committee on finance listing all such agreements. The report shall include all of the following:

18.55(6)(f)1. 1. A description of each agreement, including a summary of its terms and conditions, rates, maturity, and the estimated market value of each agreement.

18.55(6)(f)2. 2. An accounting of amounts that were required to be paid and received on each agreement.

18.55(6)(f)3. 3. Any credit enhancement, liquidity facility, or reserves, including an accounting of the costs and expenses incurred by the state.

18.55(6)(f)4. 4. A description of the counterparty to each agreement.

18.55(6)(f)5. 5. A description of the counterparty risk, the termination risk, and other risks associated with each agreement.

18.55 History History: 1977 c. 29; 1985 a. 29; 1987 a. 69; 1989 a. 31, 46; 1999 a. 9; 2003 a. 33; 2005 a. 25; 2007 a. 20; 2009 a. 180.

18.56 18.56 Revenue obligations. The commission may authorize, for any of the purposes described in s. 18.53 (3), the issuance of revenue obligations. The revenue obligations shall mature at any time not exceeding 50 years from the date thereof as the commission shall determine. The revenue obligations shall be payable only out of the redemption fund provided under s. 18.561 (5) or 18.562 (3) and each revenue obligation shall contain on its face a statement to that effect. A revenue obligation may contain a provision authorizing redemption, in whole or in part, at stipulated prices, at the option of the commission and shall provide the method of redeeming the revenue obligations.

18.56 History History: 1977 c. 29; 1979 c. 34, 155; 1989 a. 31, 46; 1999 a. 9.

18.56 Annotation A federal provision subjecting interest on unregistered state and local bonds to federal income tax does not violate the 10th amendment or the intergovernmental tax immunity doctrine. South Carolina v. Baker, 485 U.S. 505 (1988).

18.561 18.561 Enterprise obligations.

18.561(1) (1) Payment with revenue obligations. The state and a contracting party may provide, in any contract for purchasing or acquiring a revenue-producing enterprise or program, that payment shall be made in revenue obligations.

18.561(2) (2) Security interests of owners of enterprise obligations. There is a mortgage lien upon or security interest in the income and property of each revenue-producing enterprise or program for the benefit of the owners of the related enterprise obligations. No physical delivery, recordation or other action is required to perfect the security interest. The income and property of the revenue-producing enterprise or program shall remain subject to the lien until provision for payment in full of the principal and interest of the enterprise obligations has been made, as provided in the authorizing resolution. Any owner of such enterprise obligations may either at law or in equity protect and enforce the lien and compel performance of all duties required by this section. If there is any default in the payment of the principal or interest of any of such enterprise obligations, any court having jurisdiction of the action may appoint a receiver to administer the revenue-producing enterprise or program on behalf of the state and the owners of the enterprise obligations, with power to charge and collect rates sufficient to provide for the payment of the operating expenses and also to pay any enterprise obligations outstanding against the revenue-producing enterprise or program, and to apply the income and revenues thereof in conformity with this subchapter and the authorizing resolution, or the court may declare the whole amount of the enterprise obligations due and payable, if such relief is requested, and may order and direct the sale of the revenue-producing enterprise or program. Under any sale so ordered, the purchaser shall be vested with an indeterminate permit to maintain and operate the revenue-producing enterprise or program. The legislature may provide for additions, extensions and improvements to a revenue-producing enterprise or program to be financed by additional issues of enterprise obligations as provided by this section. Such additional issues of enterprise obligations shall be subordinate to all prior related issues of enterprise obligations which may have been made under this section, unless the legislature, in the statute authorizing the initial issue of enterprise obligations, permits the issue of additional enterprise obligations on a parity therewith.

18.561(3) (3) Dedication of revenues. As accurately as possible in advance, the commission and the state department or agency carrying out program responsibilities for which enterprise obligations are to be issued shall determine, and the commission shall fix in the authorizing resolution for such enterprise obligations: the proportion of the revenues of the revenue-producing enterprise or program which shall be necessary for the reasonable and proper operation and maintenance thereof; the proportion of the revenues which shall be set aside as a proper and adequate replacement and reserve fund; and the proportion of the revenues which shall be set aside and applied to the payment of the principal and interest of the enterprise obligations, and shall provide that the revenues be set aside in separate funds. At any time after one year’s operation, the state department or agency and the commission may recompute the proportion of the revenues which shall be assignable under this subsection based upon the experience of operation or upon the basis of further financing.

18.561(4) (4) Replacement and reserve fund. The proportion set aside to the replacement and reserve fund shall be available and shall be used, whenever necessary, to restore any deficiency in the redemption fund for the payment of the principal and interest due on enterprise obligations and for the creation and maintenance of any reserves established by the authorizing resolution to secure such payments. At any time when the redemption fund is sufficient for said purposes, moneys in the replacement and reserve fund may, subject to available appropriations, be expended either in the revenue-producing enterprise or program or in new acquisitions, constructions, extensions, additions, expansions or improvements. Any accumulations of the replacement and reserve fund may be invested as provided in this subchapter, and if invested, the income from the investment shall be carried in the replacement and reserve fund.

18.561(5) (5) Redemption fund. The proportion which shall be set aside for the payment of the principal of and interest on the enterprise obligations and, as directed by the commission, payments to be received with respect to an agreement or ancillary arrangement entered into pursuant to s. 18.55 (6), shall, at such times as provided in the authorizing resolution, be set apart and paid into a separate fund in the treasury or in an account maintained by a trustee appointed for that purpose in the authorizing resolution to be identified as “the ... redemption fund”. Each redemption fund shall be expended, and all moneys from time to time on hand therein are irrevocably appropriated, in sums sufficient, only for the payment of principal of and interest on the enterprise obligations giving rise to it and premium, if any, due upon redemption of any such obligations, and for payment of obligations under an agreement or ancillary arrangement entered into under s. 18.55 (6) to the extent provided for in an authorizing resolution. Moneys in the redemption funds may be commingled only for the purpose of investment with other public funds, but they shall be invested only in investment instruments permitted in s. 25.17 (3) (dr). All such investments shall be the exclusive property of the fund and all earnings on or income from such investments shall be credited to the fund.

18.561(6) (6) Redemption fund surplus. If any surplus is accumulated in any of the redemption funds, subject to any contract rights vested in owners of enterprise obligations secured thereby, it shall be paid over to the treasury.

18.561(7) (7) Payment for services. The reasonable cost and value of any service rendered to the state by a revenue-producing enterprise or program shall be charged against the state and shall be paid for by it in periodic installments, subject to available appropriations.

18.561(8) (8) Rates for services. The rates for all services rendered by a revenue-producing enterprise or program to the state or to other consumers, shall be reasonable and just, taking into account and consideration the value of the services, the cost of maintaining and operating the same, the proper and necessary allowance for depreciation replacement and reserve, and a sufficient and adequate return upon the capital invested.

18.561(9) (9) Authorizing resolution. The commission may provide in the authorizing resolution for enterprise obligations or by subsequent action all things necessary to carry into effect this section. Any authorizing resolution shall constitute a contract with the owners of any enterprise obligations issued pursuant to the resolution. Any authorizing resolution may contain such provisions or covenants, without limiting the generality of the power to adopt the resolution, as are deemed necessary or desirable for the security of the owners of enterprise obligations or the marketability of the enterprise obligations.

18.561(10) (10) Sinking fund. The authorizing resolution may set apart enterprise obligations the par value of which are equal to the principal amount of any secured obligation or charge subject to which a revenue-producing enterprise or program is to be purchased or acquired, and shall set aside in a sinking fund from the income of the revenue-producing enterprise or program, a sum sufficient to comply with the requirements of the instrument creating the security interest. If the instrument does not make any provision for a sinking fund, the resolution shall fix and determine the amount that shall be set aside into the sinking fund from month to month for interest on the secured obligation or charge, and a fixed amount or proportion not exceeding a stated sum, which shall be not less than one percent of the principal, to be set aside into the fund to pay the principal of the secured obligation or charge. Any balance in the fund after satisfying the secured obligations or charge shall be transferred to the redemption fund. Enterprise obligations set aside for the secured obligation or charge may, from time to time, be issued to an amount sufficient with the amount then in the sinking fund, to pay and retire the secured obligation or charge or any portion thereof. The enterprise obligations may be issued in exchange for or satisfaction of the secured obligation or charge, or may be sold in the manner provided in this subchapter, and the proceeds applied in payment of the same at maturity or before maturity by agreement with the owner of the secured obligation or charge. The commission and the owners of any revenue-producing enterprise or program acquired or purchased may, upon such terms and conditions as are satisfactory, contract that enterprise obligations to provide for the discharge of the secured obligation or charge, or for the whole purchase price shall be deposited with a trustee or depository and released from the deposit from time to time on such terms and conditions as are necessary to secure the payment of the secured obligation or charge.

18.561 History History: 1999 a. 9 ss. 133 to 141; 2001 a. 16; 2003 a. 33.

18.562 18.562 Special fund obligations.

18.562(1) (1) Security interest in special fund.

18.562(1)(a) (a) There is a security interest, for the benefit of the owners of the special fund obligations and other persons specified in the authorizing resolution providing for the issuance of the particular special fund obligations, in the amounts that arise after the creation of the special fund program in the special fund related to the special fund obligations. For this purpose, amounts in the special fund shall be accounted for on a first-in, first-out basis, and no physical delivery, recordation, or other action is required to perfect the security interest.

18.562(1)(b) (b)

18.562(1)(b)1. 1. Except as provided in subd. 2., the security interest for the benefit of the owners of the special fund obligations and other persons specified in the authorizing resolution providing for the issuance of the particular special fund obligations shall have priority over all conflicting security interests to the fees, penalties, or excise taxes that are required to be deposited in the special fund.

18.562(1)(b)2. 2. For different special fund obligations secured by the same fees, penalties, or excise taxes, priority shall be established according to the date of issuance of the special fund obligation or the incurrence of the other obligations specified in an authorizing resolution, if applicable, with earlier issuances or incurrences having priority over later issuances or incurrences, unless laws governing the issuance of a particular special fund obligation or the authorizing resolution providing for the issuance of a particular special fund obligation permit later issuances or incurrences on a parity or priority basis.

18.562(1)(c) (c) The special fund shall remain subject to the security interest until provision for payment in full of the principal and interest of the special fund obligations, and other obligations specified in the authorizing resolution providing for the issuance of the particular special fund obligations, has been made, as provided in the authorizing resolution.

18.562(1)(d) (d) An owner of special fund obligations may either at law or in equity protect and enforce the security interest and compel performance of all duties required by this section.

18.562(2) (2) Use of special fund moneys. The commission and the state agency carrying out the special fund program responsibilities shall jointly determine, and the commission shall fix in the authorizing resolution for the obligations, the conditions under which money in the special fund shall be set aside and applied to the payment of the principal and interest of the obligations, deposited in funds established under the authorizing resolution or made available for other purposes.

18.562(3) (3) Redemption fund. The special fund revenues that are to be set aside for the payment of the principal of and interest on the special fund obligations and, as directed by the commission, payments to be received with respect to an agreement or ancillary arrangement entered into under s. 18.55 (6), shall be paid into a separate fund in the treasury or in an account maintained by a trustee appointed for that purpose in the authorizing resolution to be identified as “the ... redemption fund”. Each redemption fund shall be expended, and all moneys from time to time on hand therein are irrevocably appropriated, in sums sufficient, only for the payment of principal of and interest on the special fund obligations giving rise to it and premium, if any, due upon redemption of any such obligations, and for payment of obligations under an agreement or ancillary arrangement entered into under s. 18.55 (6) to the extent provided for in an authorizing resolution. Moneys in the redemption funds may be commingled only for the purpose of investment with other public funds, but they shall be invested only in investment instruments permitted in s. 25.17 (3) (dr). All such investments shall be the exclusive property of the fund and all earnings on or income from such investments shall be credited to the fund.

18.562(4) (4) Surplus. If any surplus is accumulated in any of the redemption funds, subject to contract rights vested in the owners of special fund obligations secured thereby, it shall be paid over to the treasury.

18.562(5) (5) Authorizing resolution. The commission may provide in the authorizing resolution for special fund obligations or by subsequent action all things necessary to carry into effect this section. Any authorizing resolution shall constitute a contract with the owners of any special fund obligations issued pursuant to the resolution. An authorizing resolution may contain such provisions or covenants, without limiting the generality of the power to adopt the resolution, as are deemed necessary or desirable for the security of owners of special fund obligations or the marketability of the special fund obligations.

18.562 History History: 1999 a. 9; 2001 a. 16; 2003 a. 33.

18.57 18.57 Funds established for revenue obligations.

18.57(1) (1) A separate and distinct fund shall be established in the state treasury or in an account maintained by a trustee appointed for that purpose by the authorizing resolution with respect to each revenue-producing enterprise or program the income from which is to be applied to the payment of any enterprise obligation. A separate and distinct fund shall be established in the state treasury or in an account maintained by a trustee appointed for that purpose by the authorizing resolution with respect to any special fund program that is financed through the issuance of special fund obligations. All moneys resulting from the issuance of evidences of revenue obligation shall be credited to the appropriate fund, applied for refunding or note renewal purposes, or to make deposits to reserve funds, except that moneys which represent accrued interest or, to the extent provided in the resolution authorizing the issuance of such evidences of revenue obligation, premium received on the issuance of evidences shall be credited to the appropriate redemption fund. As determined by the commission, payments to be received under an agreement or ancillary arrangement entered into under s. 18.55 (6) with respect to any such issuance of evidences of revenue obligation shall be credited to the appropriate fund.

18.57(2) (2) Moneys in such funds may be expended, pursuant to appropriations, only for the purposes and in the amounts for which borrowed, for the payment of the principal of and interest on related revenue obligations, to make deposits to reserve funds, and to make ancillary payments.

18.57(3) (3) Moneys in such funds may be commingled only for the purpose of investment with other public funds, but they shall be invested only in investment instruments permitted in s. 25.17 (3) (b) or in environmental improvement fund investment instruments permitted in s. 281.59 (2m). All such investments shall be the exclusive property of such fund and all earnings on or income from investments shall be credited to such fund and shall become available for any of the purposes under sub. (2) and for the payment of interest on related revenue obligations.

18.57(4) (4) If, after all outstanding related revenue obligations have been paid or payment provided for, moneys remain in a fund created under sub. (1), all of the following shall occur:

18.57(4)(a) (a) If the fund created under sub. (1) is in an account maintained by a trustee appointed by an authorizing resolution, the moneys shall be paid over to the treasury.

18.57(4)(b) (b) The fund created under sub. (1) shall be closed.

18.57 History History: 1977 c. 29; 1979 c. 34, 155; 1989 a. 366; 1995 a. 227; 1997 a. 27; 1999 a. 9, 185; 2001 a. 16; 2003 a. 33.

18.58 18.58 Other fiscal and administrative regulations.

18.58(1) (1) Management of funds and records. All funds established under this subchapter which are deposited in the state treasury shall be managed as provided by law for other state funds, subject to any contract rights vested in owners of evidences of revenue obligation secured by such fund. The department of administration shall maintain full and correct records of each fund. The legislative audit bureau shall audit each fund as of January 1 of each year reconciling all transactions and showing the fair market value of all property on hand. All records and audits shall be public documents. All funds established under this subchapter which are deposited with a trustee appointed for that purpose by the authorizing resolution shall be managed in accordance with resolutions authorizing the issuance of revenue obligations, agreements between the commission and the trustee and any contract rights vested in owners of revenue obligations secured by such fund.

18.58(3) (3) Extinguishment of debt. Interest shall cease to accrue on a revenue obligation on the date that the obligation becomes due for payment if payment is made or duly provided for, but the obligation and accrued interest shall continue to be a binding obligation according to its terms until 6 years overdue for payment, or such longer period as may be required by federal law. At that time, unless demand for its payment has been made, it shall be extinguished and shall be deemed no longer outstanding.

18.58(4) (4) Substantive covenants. Notwithstanding any other provision of this subchapter, the state department or agency head carrying out program responsibilities for which a revenue obligation has been authorized by the legislature shall have the authority to formulate covenants respecting the operation of the related enterprise or program. The department or agency head shall consult with the commission with respect to the effect of any proposed covenants on the sale of the proposed revenue obligation. Nothing in this subsection shall be construed to expand the powers of any state department or agency.

18.58 History History: 1977 c. 29; 1979 c. 34; 1999 a. 9; 2003 a. 33.

18.59 18.59 Bond anticipation notes.

18.59(1) (1) Whenever the commission has adopted an authorizing resolution for revenue-obligation bonds for any one or more of the purposes described in s. 18.53 (3), it may, prior to the issuance of the bonds and in anticipation of their sale, adopt an authorizing resolution for revenue-obligation bond anticipation notes. The authorizing resolution shall recite that all conditions precedent to the issuance of revenue-obligation bonds required by law or by the resolution authorizing the bonds have been complied with and that the notes are issued for the purposes for which the bonds were authorized or to renew notes issued for such purposes. The authorizing resolution shall pledge to the payment of the principal of the notes the proceeds of the sale of the bonds. Upon the adoption of the authorizing resolution, the authorizing resolution for the bonds shall be irrevocable until the notes have been paid.

18.59(2) (2) All original revenue-obligation bond anticipation notes shall be named revenue-bond anticipation notes and shall recite on their face that they are payable solely from the proceeds of revenue-obligation bonds to be issued under this subchapter. The aggregate amount of such notes outstanding including interest to accrue shall not exceed the aggregate principal amount of the bonds in anticipation of the sale of which they are issued. The rate of interest borne by the notes shall not exceed any maximum rate of interest authorized to be borne by the bonds. No lien shall be created or attached with respect to any property of the state as a consequence of the issuance of such notes except as provided in sub. (4).

18.59(4) (4) Upon the issuance of revenue-obligation bond anticipation notes, there shall be paid into the funds or accounts respectively provided for the payment of the principal and interest of the revenue-obligation bonds in anticipation of the sale of which the notes are issued, from the portion of the income of the enterprise or program allocated to the payment of principal and interest, the same amount at the same times as would have been required to be paid for the payment of the principal and interest of the bonds if the bonds, in an equal principal amount and at the same rate of interest, maturing in annual installments over 50 years, had been issued instead of the notes. Such moneys or any part thereof may, by the authorizing resolution for the notes, be pledged for the payment of the principal and interest of the notes.

18.59(5) (5) All funds derived from the sale of revenue-obligation bonds or renewal notes issued subsequent to the issuance of revenue-obligation bond anticipation notes which the notes were issued in anticipation of the sale shall constitute a trust fund, and the fund shall be expended first for the payment of principal and interest of the notes, and then may be expended for other purposes set forth in the authorizing resolution for the bonds or renewal notes.

18.59(6) (6) The commission may authorize the issuance of renewal revenue-obligation bond anticipation notes to provide funds for the payment of the principal and interest of any such notes then outstanding. All of the provisions of this section shall apply to the renewal notes.

18.59 History History: 1977 c. 29; 2001 a. 16.

18.60 18.60 Refunding obligations.

18.60(1) (1) The commission may authorize, for any one or more of the purposes described in s. 18.53 (1), the issuance of revenue-obligation refunding obligations. Refunding obligations may be issued, subject to any contract rights vested in owners of obligations or notes being refinanced, to refinance more than one issue of obligations or notes notwithstanding that the obligations or notes may have been issued at different times for different purposes and may be secured by the property or income of more than one enterprise or program or special fund or may be public debt or building-corporation indebtedness. The principal amount of refunding obligations shall not exceed the sum of: the principal amount of the obligations or notes being refinanced; applicable redemption premiums; unpaid interest on the obligations or notes to the date of delivery or exchange of the refunding obligations; in the event the proceeds are to be deposited in trust as provided in sub. (3), interest to accrue on the obligations or notes from the date of delivery to the date of maturity or to the redemption date selected by the commission, whichever is earlier; and the expenses incurred in the issuance of the refunding obligations and the payment of the obligations or notes. A determination by the commission that a refinancing is advantageous or that any of the amounts provided in the preceding sentence should be included in the refinancing shall be conclusive.

18.60(2) (2) If the commission determines to exchange refunding obligations, they may be exchanged privately for and in payment and discharge of any of the outstanding obligations or notes being refinanced. Refunding obligations may be exchanged for such principal amount of the obligations or notes being exchanged therefore as may be determined by the commission to be necessary or advisable. The owners of the obligations or notes being refunded who elect to exchange need not pay accrued interest on the refunding obligations if and to the extent that interest is accrued and unpaid on the obligations or notes being refunded and to be surrendered. If any of the obligations or notes to be refinanced are to be called for redemption, the commission shall determine which redemption dates shall be used, if more than one date is applicable and shall, prior to the issuance of the refunding obligations, provide for notice of redemption to be given in the manner and at the times required by the proceedings authorizing the outstanding obligations or notes.

18.60(3) (3) The principal proceeds from the sale of any refunding obligations shall be applied either to the immediate payment and retirement of the obligations or notes being refinanced or, if the obligations or notes have not matured and are not presently redeemable, to the creation of a trust for and shall be pledged to the payment of the obligations or notes being refinanced. If a trust is created, a separate deposit shall be made for each issue of obligations or notes being refinanced. Each deposit shall be with the secretary of administration or a bank or trust company that is then a member of the federal deposit insurance corporation. If the total amount of any deposit, including money other than sale proceeds but legally available for such purpose, is less than the principal amount of the obligations or notes being refinanced and for the payment of which the deposit has been created and pledged, together with applicable redemption premiums and interest accrued and to accrue to maturity or to the date of redemption, then the application of the sale proceeds shall be legally sufficient only if the money deposited is invested in securities issued by the United States or one of its agencies, or securities fully guaranteed by the United States, and only if the principal amount of the securities at maturity and the income therefrom to maturity will be sufficient and available, without the need for any further investment or reinvestment, to pay at maturity or upon redemption the principal amount of the obligations or notes being refinanced together with applicable redemption premiums and interest accrued and to accrue to maturity or to the date of redemption. The income from the principal proceeds of the securities shall be applied solely to the payment of the principal of and interest and redemption premiums on the obligations or notes being refinanced, but provision may be made for the pledging and disposition of any surplus. Nothing in this subsection shall be construed as a limitation on the duration of any deposit in trust for the retirement of obligations or notes being refinanced, but which have not matured and which are not presently redeemable. Nothing in this subsection shall be construed to prohibit reinvestment of the income of a trust if the reinvestments will mature at such times that sufficient cash will be available to pay interest, applicable premiums, and principal on the obligations or notes being refinanced.

18.60(4) (4) The commission may in addition to the other powers conferred by this subchapter, include a provision in any authorizing resolution for refunding obligations pledging all or any part of the special fund or income of any enterprise or program originally financed from the proceeds of any of the obligations or notes being refinanced, or pledging all or any part of the surplus income derived from the investment of any trust created under sub. (3), or both.

18.60(5) (5) All of the following provisions that are not inconsistent with the express provisions of this section shall apply to refunding obligations, except that the maximum permissible term shall be 50 years from the date of original issue of the oldest note or obligation issue being refunded:

18.60(5)(a) (a) Section 18.56.

18.60(5)(b) (b) In the case of enterprise obligations, s. 18.561.

18.60(5)(c) (c) In the case of special fund obligations, s. 18.562.

18.60 History History: 1977 c. 29; 1999 a. 9; 2003 a. 33.

18.61 18.61 Undertakings of state.

18.61(1) (1) The state shall not be generally liable on revenue obligations and revenue obligations shall not be a debt of the state for any purpose whatsoever. All evidences of revenue obligation shall contain on their face a statement to that effect.

18.61(2) (2) The state pledges and agrees with the owners of revenue obligations that the state will not limit or alter its powers to fulfill the terms of any agreements made with the owners or in any way impair the rights and remedies of the owners until the revenue obligations, together with interest including interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the owners, are fully met and discharged. The commission may include this pledge and agreement of the state in any agreement with the owners of revenue obligation.

18.61(3) (3) 

18.61(3)(a) (a) If the state fails to pay any revenue obligation in accordance with its terms, and default continues for a period of 30 days or if the state fails or refuses to comply with this subchapter or defaults in any agreement made with the owners of any issue of revenue obligations, the owners of 25 percent in aggregate principal amount of the revenue obligations of the issue then outstanding, by instrument recorded in the office of the register of deeds of Dane County and approved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the owners of the revenue obligations for the purposes specifically provided in the instrument.

18.61(3)(b) (b) The trustee may, and upon written request of the owners of 25 percent in aggregate principal amount of the revenue obligations of the issue then outstanding shall, in the trustee’s own name:

18.61(3)(b)1. 1. By action or proceeding, enforce all rights of all owners of the issue of revenue obligations, including the right to require the state to collect enterprise or program income or special fund income adequate to carry out any agreement as to, or pledge of, such income and to require the state to carry out any other agreements with the owners of the revenue obligations and to perform its duties under this subchapter;

18.61(3)(b)2. 2. Bring suit upon the revenue obligation;

18.61(3)(b)3. 3. By action, require the state to account as if it were the trustee of an express trust for the owners of the revenue obligations;

18.61(3)(b)4. 4. By action, enjoin any acts or things which may be unlawful or in violation of the rights of the owners of the revenue obligations; and

18.61(3)(b)5. 5. Declare all the revenue obligations due and payable, and if all defaults shall be made good, the aggregate principal amount of the revenue obligations of the issue then outstanding, to annul the declaration and its consequences.

18.61(3)(c) (c) The trustee shall have all of the powers necessary or appropriate for the exercise of any functions specifically set forth in this subchapter or incident to the general representation of the owners of revenue obligations in the enforcement and protection of their rights.

18.61(3)(d) (d) Before declaring the principal of revenue obligations due and payable, the trustee shall first give 30 days’ notice in writing to the governor and the attorney general.

18.61(3)(e) (e) Any action or proceeding by the trustee against the state may be commenced by delivering a copy of the summons and of the complaint to the attorney general or leaving them at the attorney general’s office with an assistant or clerk. The place of trial of such an action shall be as provided in s. 801.50. Sections 16.53 and 775.01 shall not apply to such claims. If there is final judgment against the state in such action, it shall be paid as provided in s. 775.04, together with interest at the rate of 10 percent per year from the date payment was judged to have been due until the date of payment of the judgment.

18.61(4) (4) Any public officer or public employee, as defined in s. 939.22 (30), and the surety on the person’s official bond, or any other person participating in any direct or indirect impairment of any fund established under this subchapter, shall be liable in any action brought by the attorney general in the name of the state, or by any taxpayer of the state, or by the owner of revenue obligation payable in whole or in part, directly or indirectly, out of such fund, to restore to the fund all diversions from the fund.

18.61(5) (5) The legislature may provide, with respect to any specific issue of revenue obligations, prior to their issuance, that if the special fund income or the enterprise or program income pledged to the payment of the principal and interest of the issue is insufficient for that purpose, or is insufficient to replenish a reserve fund, if applicable, it will consider supplying the deficiency by appropriation of funds, from time to time, out of the treasury. If the legislature so provides, the commission may make the necessary provisions therefor in the authorizing resolution and other proceedings of the issue. Thereafter, if the contingency occurs, recognizing its moral obligation to do so, the legislature hereby expresses its expectation and aspiration that it shall make such appropriation.

18.61 History History: 1977 c. 29; 1979 c. 32 s. 92 (5); 1979 c. 107; 1981 c. 336; 1983 a. 228 s. 16; 1993 a. 301; 1999 a. 9; 2001 a. 103; 2005 a. 25.

18.62 18.62 Revenue obligations as legal investments. Any other provision of law to the contrary notwithstanding, any of the following may legally invest any sinking funds, moneys, or other funds belonging to them or within their control in any revenue obligations issued under this subchapter, which shall be authorized security for all public deposits: