Chapter 18

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:

18.62(1) (1) The state, the investment board, public officers, municipal corporations, political subdivisions, and public bodies.

18.62(2) (2) Banks and bankers, savings and loan associations, credit unions, trust companies, savings banks and institutions, investment companies, insurance companies, insurance associations, and other persons carrying on a banking or insurance business.

18.62(3) (3) Personal representatives, guardians, trustees, and other fiduciaries.

18.62 History History: 1977 c. 29; 2001 a. 102.

18.63 18.63 Validation of revenue obligations.

18.63(1) (1) Notwithstanding any defects, irregularities, lack of power or failure to comply with any statute or any act of the commission, all revenue obligations issued or attempted to be issued after July 1, 1977 are declared to be valid; all instruments given after July 1, 1977 to evidence the obligation are declared to be binding, legal, valid, enforceable and incontestable in accordance with their terms; and all proceedings taken and certifications and determinations made after July 1, 1977 to authorize, issue, sell, execute, deliver or enter into the obligation or instruments are validated, ratified, approved and confirmed.

18.63(2) (2) A determination, legislative, judicial or administrative, for any reason, that the state may not spend the proceeds of revenue obligations or that it has spent the proceeds for a purpose other than the stated purpose for which the revenue obligations were issued or for a purpose for which the state may not spend money, shall not affect the validity of the revenue obligations nor the evidence of revenue obligation therefor.

18.63 History History: 1977 c. 29.

18.64 18.64 Minority financial advisers and investment firms; disabled veteran-owned financial advisers and investment firms.

18.64(1) (1) In this section:

18.64(1)(a) (a) “Disabled veteran-owned financial adviser” means a financial adviser certified by the department of administration under s. 16.283 (3).

18.64(1)(b) (b) “Disabled veteran-owned investment firm” means an investment firm certified by the department of administration under s. 16.283 (3).

18.64(1)(c) (c) “Minority financial adviser” means a financial adviser certified by the department of administration under s. 16.287 (2).

18.64(1)(d) (d) “Minority investment firm” means an investment firm certified by the department of administration under s. 16.287 (2).

18.64(2) (2) 

18.64(2)(a) (a) Except as provided under sub. (7), in issuing evidences of revenue obligations by competitive sale, the commission shall ensure that at least 6 percent of the total of revenue obligations contracted in each fiscal year is underwritten by minority investment firms.

18.64(2)(b) (b) Except as provided under sub. (7), in issuing evidences of revenue obligations by competitive sale, the commission shall make efforts to ensure that at least 1 percent of the total of revenue obligations contracted in each fiscal year is underwritten by disabled veteran-owned investment firms.

18.64(3) (3) 

18.64(3)(a) (a) Except as provided under sub. (7), in issuing evidences of revenue obligations by negotiated sale, the commission shall ensure that at least 6 percent of the total of revenue obligations contracted in each fiscal year is underwritten by minority investment firms.

18.64(3)(b) (b) Except as provided under sub. (7), in issuing evidences of revenue obligations by negotiated sale, the commission shall make efforts to ensure that at least 1 percent of the total of revenue obligations contracted in each fiscal year is underwritten by disabled veteran-owned investment firms.

18.64(4) (4) 

18.64(4)(a) (a) Except as provided under sub. (7), in issuing evidences of revenue obligations by competitive sale or negotiated sale, the commission shall ensure that at least 6 percent of the total moneys expended in such fiscal year for the services of financial advisers are expended for the services of minority financial advisers.

18.64(4)(b) (b) Except as provided under sub. (7), in issuing evidences of revenue obligations by competitive sale or negotiated sale, the commission shall make efforts to ensure that at least 1 percent of the total moneys expended in each fiscal year for the services of financial advisers are expended for the services of disabled veteran-owned financial advisers.

18.64(5) (5) 

18.64(5)(a) (a) Except as provided under sub. (7), an individual underwriter or syndicate of underwriters shall ensure that each bid or proposal, submitted by that individual or syndicate in a competitive or negotiated sale of a revenue obligation, provides for a portion of sales to minority investment firms.

18.64(5)(b) (b) Except as provided under sub. (7), an individual underwriter or syndicate of underwriters shall make efforts to ensure that each bid or proposal, submitted by that individual or syndicate in a competitive or negotiated sale of a revenue obligation, provides for at least 1 percent of sales to disabled veteran-owned investment firms.

18.64(6) (6) The commission shall annually report to the department of administration the total amount of revenue obligations contracted with the underwriting services of minority investment firms and disabled veteran-owned investment firms and the total amount of moneys expended for the services of minority financial advisers and disabled veteran-owned financial advisers during the preceding fiscal year.

18.64(7) (7) The requirements of any of subs. (2) to (5) do not apply to an issuance of evidence of a revenue obligation, if the secretary of administration submits a report in writing specifying the building commission’s reasons for not complying with the requirements of any of subs. (2) to (5) for that issuance.

18.64 History History: 1987 a. 27; 1989 a. 366; 1991 a. 32; 1995 a. 27 s. 9116 (5); 2009 a. 299; 2011 a. 32; 2011 a. 260 s. 80; 2013 a. 192.

subch. III of ch. 18 SUBCHAPTER III

OPERATING NOTES

18.70 18.70 Provisions applicable. The following sections apply to this subchapter, except that all references to “public debt,” “debt,” or “revenue obligation” are deemed to refer to “operating notes,” all references to “evidence of indebtedness” are deemed to refer to “evidence of operating note,” and all references to “evidences of indebtedness” are deemed to refer to “evidences of operating notes”: ss. 18.03, 18.06 (8), 18.07, 18.10 (1), (2), (4) to (9), and (11), 18.17, 18.52 (1m), 18.61 (1), 18.62, and 18.63.

18.70 History History: 1983 a. 3; 1991 a. 39; 2003 a. 320.

18.71 18.71 Definitions. In this subchapter, unless the context requires otherwise:

18.71(1d) (1d) “Aggregate expected debt service and net exchange payments” means the sum of the following:

18.71(1d)(a) (a) The aggregate net payments expected to be made and received under a specified interest exchange agreement under s. 18.73 (5) (a).

18.71(1d)(b) (b) The aggregate debt service expected to be made on notes related to that agreement.

18.71(1d)(c) (c) The aggregate net payments expected to be made and received under all other interest exchange agreements under s. 18.73 (5) (a) relating to those notes that are in force at the time of executing the agreement.

18.71(1m) (1m) “Commission” means the building commission.

18.71(2) (2) “Department” means the department of administration.

18.71(3) (3) “Evidence of operating note” means a written promise to pay an operating note.

18.71(4) (4) “Operating note” means every undertaking of the state to repay a certain amount of a financial obligation which is:

18.71(4)(a) (a) Created for the purpose of funding operating deficits of the state as determined under s. 16.405 (1), which must be repaid not later than the last day of the fiscal year during which the operating note is issued;

18.71(4)(b) (b) Payable from and secured solely by revenues pledged by the commission and the department pursuant to the authorizing resolution provided that all such pledged revenues must first be available for the payment of public debt; and

18.71(4)(c) (c) Not public debt under s. 18.01 (4) nor a revenue obligation under s. 18.52 (5).

18.71(5) (5) “Public debt” or “debt” has the meaning given under s. 18.01 (4).

18.71 History History: 1983 a. 3; 1983 a. 36 s. 96 (4); 1983 a. 192; 1985 a. 29; 2007 a. 20.