AB481: Bill Text

LRB-2893/2

TKK:jld

2015 - 2016 LEGISLATURE

2015 Assembly BILL 481

November 4, 2015 - Introduced by Representatives Schraa, Jacque, Tittl, Edming, R. Brooks, T. Larson, Knodl, Skowronski, Murphy, Craig, Jarchow, Petersen, Gannon, Sanfelippo, Kremer, Neylon, Brandtjen and Weatherston, cosponsored by Senators Stroebel, Lasee and Kapenga. Referred to Committee on Education.

AB481,1,12 An Act to renumber and amend 24.66 (3) (a), 24.66 (3) (b) and 121.91 (3) (a); to amend 7.52 (8), 8.06, 24.66 (3) (am), 24.66 (3) (bm), 24.66 (3) (c) 1., 24.66 (3) (c) 2., 24.66 (3) (c) 3., 67.05 (3) (intro.), 67.05 (6), 67.05 (6a) (a) 2. (intro.), 67.05 (6a) (a) 2. a., 67.05 (6a) (a) 2. b., 67.05 (6a) (am) 1., 67.05 (6a) (b) (intro.), 67.05 (7) (cc), 67.05 (7) (d) 2., 67.05 (7) (d) 3. and (j), 67.12 (8) (a) 2., 67.12 (12) (e) 1., 2g. (intro.), 3. and 4., 119.48 (4), 119.49 (1), 119.49 (2) and 121.91 (3) (c); and to create 24.66 (3) (a) 2., 24.66 (3) (b) 2., 24.66 (3) (c) 4., 67.05 (2m), 67.12 (12) (ec), 119.48 (5), 119.49 (2m), 121.91 (3) (a) 1. b. and 121.91 (3) (a) 2. of the statutes; relating to: limitations on borrowing by school districts and the use by school districts of resolutions and referenda to authorize bonding for capital projects or increase revenue limits and scheduling of school district referendums to exceed revenue limits.

Analysis by the Legislative Reference Bureau

Current law provides several mechanisms for a school district to borrow money and raise revenue.

Loans and Bond Issues

Currently, before a school district may borrow money or issue bonds, the school board must adopt an initial resolution stating the purposes for and the maximum amount of the proposed loan or bond issuance. Once an initial resolution has been adopted, the school board must call a special meeting at which the electors of the school district will consider the resolution. The school board may either schedule a special election at which the resolution is submitted by referendum to the electors of the school district or hold a hearing at which the electors are informed about the proposed loan or bond issue. If the school board schedules a hearing rather than a special election and the amount of money to be raised by the bond issue will cause the aggregate amount of outstanding indebtedness incurred by the school district without a referendum to exceed the lesser of $1,000,000 or 1.5 percent of the statewide average equalized valuation per member multiplied by the school district's membership, a special election may still be required if a sufficient number of school district electors petition the school district to hold a referendum.

Revenue Limit Adjustments

Although current law generally limits the total amount of revenue that a school district may receive from general school aids and property taxes to the amount of revenue increase allowed per pupil in the previous school year, a school board may increase the school district's revenue limit by a specified amount if the school board adopts a resolution to that effect and the district's electors approve the increase at a referendum.

Under current law, the school board must call a special referendum at which the electors vote to approve or reject the resolution. Current law also permits the school board to schedule the referendum to be held concurrently with any primary election or election that falls no sooner than 70 days after the date on which the board files the resolution.

Loans from the State Trust Funds

Current law permits a school board to apply to the Board of Commissioners of Public Lands for a loan to the school district from the state trust funds (the common school fund, the normal school fund, the university fund, and the agricultural college fund). With certain exceptions, in order for the school board of a unified school district to obtain a state trust fund loan, the application must be approved by a majority of the electors of the school district who vote on the application by referendum at a special election. With certain exceptions, in order for the school board of a first class city school district (the Milwaukee Public School District, or MPS) or of a common or union high school district to obtain a state trust fund loan, a majority of the legal voters of the school district who vote on the question must approve the loan application, but the school board is not required to hold a special election on the application. Unless certain factors apply, the school board of any school district, including a unified school district, may adopt and record a resolution to obtain a loan with a repayment period of ten years or less without submitting the application to the voters by referendum at a special election. The factors affecting whether the school board must hold a special election include the amount of the loan, the purpose of the loan, the aggregate amount of outstanding indebtedness of the school district incurred without a referendum, and whether a sufficient number of electors of the school district timely file a petition for a referendum.

Temporary Borrowing

Under current law, if two-thirds of the school board members approve a resolution to do so, the school board of any common, union high school, or unified school district may temporarily borrow money in June, July, and August to meet the immediate expenses associated with operating and maintaining the schools of the district from July1 to the last working day of October.

Promissory Notes

Current law permits a school district to adopt a resolution to borrow money through the issuance of promissory notes. A referendum may be required if the amount to be borrowed exceeds $5,000, if the borrowing causes the school district's outstanding indebtedness incurred without a referendum to exceed the lesser of $1,000,000 or 1.5 percent of the statewide average equalized valuation per member multiplied by the school district's membership, and if a sufficient number of school district electors petition the school district to hold a referendum.

Levy Limit Adjustments and Bond Issues by the Milwaukee Public School District

Under current law, the board of directors of MPS (MPS board) must annually submit its budget to the common council of the City of Milwaukee. The MPS board must include in its budget the amount of money required to operate the public schools in the city, repair and keep in order school buildings and equipment, make improvements to school property, and purchase necessary additions to school sites. Upon receipt of its budget, the common council must levy and and collect a tax sufficient for the MPS board to fulfill its statutory obligations. Current law also permits the MPS board to, upon a two-thirds vote, communicate with the common council when either of the following applies: 1) the MPS board determines it is necessary to exceed its levy rate in order to purchase school sites, construct school buildings and additions thereto, or remodel existing buildings; or 2) the MPS board determines it is necessary to issue bonds in order to construct buildings or additions to buildings, remodel buildings, or purchase school sites. Upon receipt of a communication from the MPS board, the common council must schedule a referendum for the voters of the city to approve or reject the decision of the MPS board.

This bill provides that, if a school board applies or adopts a resolution to borrow money or adopts a resolution to increase revenue through any of the mechanisms identified above and the application, resolution, or referendum is rejected by a majority of the electors of the school district, the school board may not use any of the mechanisms identified in the bill to borrow money or raise revenue for two consecutive 365-day periods.

If a school district experiences a natural disaster, including a fire, the prohibitions established in the bill do not apply for the six-month period immediately following the natural disaster.

Also under this bill, unless the school board experiences a natural disaster, including a fire, a school board may schedule a referendum for the purpose of submitting to the electors of a school district a resolution to increase the school district's revenue limit only concurrently with a spring election or with the general election. A spring election is held annually on the first Tuesday in April. The general election occurs in even-numbered years on the Tuesday following the first Monday in November. In any school year in which a school district experiences a natural disaster, the school board may call a special referendum on the resolution, provided the special referendum is held not sooner than 70 days after the resolution is filed.

For further information see the local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB481,1 Section 1. 7.52 (8) of the statutes is amended to read:

AB481,4,12 7.52 (8) The board of absentee ballot canvassers shall make full and accurate return of the votes cast for each candidate and proposition on the tally sheet forms. Each tally sheet shall record the returns for each office or referendum by ward, unless combined returns are authorized in accordance with s. 5.15 (6) (b), in which case the tally sheet shall record the returns for each group of combined wards. After recording the votes, the board of absentee ballot canvassers shall seal in a carrier envelope outside the ballot bag or container one inspector's statement under sub. (4) (d), one tally sheet, and one poll list for delivery to the county clerk, unless the election relates only to municipal or school district offices or municipal offices or referenda. The board of absentee ballot canvassers shall also similarly seal one statement, one tally sheet, and one poll list for delivery to the municipal clerk.

AB481,2 Section 2. 8.06 of the statutes is amended to read:

AB481,4,17 8.06 Special elections may be called. Towns, cities, villages, and, subject to s. 121.91 (3) (a), school districts, may call special elections for any purpose authorized by law. If an election is called for a special referendum, the election shall be noticed under s. 8.55.

AB481,3 Section 3. 24.66 (3) (a) of the statutes is renumbered 24.66 (3) (a) 1. and amended to read:

AB481,5,16 24.66 (3) (a) 1. Every application for a loan, the required repayment of which exceeds 10 years, shall be approved and authorized for a common, union high, or 1st class city school district by a vote of a majority of its legal voters voting on this question. If the vote is taken at a special meeting the objects thereof shall be clearly stated in the notice of the meeting. The application shall state the facts in detail respecting the holding of the meeting, and the taking and the result of the vote required. The application shall be signed by a majority of the members of the district board and verified by the clerk. The statement accompanying the application shall contain a correct map or plat of the district. If the district is a joint district, the statement accompanying the application shall show the assessed valuation in its several parts separately, so that the valuation of each part of the district which lies in each town or municipality may be readily shown. If a majority of the legal voters of the school district who vote on an application under this subdivision reject the application, the school district shall be subject to the prohibitions under subd. 2.

AB481,4 Section 4. 24.66 (3) (a) 2. of the statutes is created to read:

AB481,6,2 24.66 (3) (a) 2. a. Except as provided in subd. 2. b., if an application for a loan is submitted to the legal voters of the school district as provided in subd. 1. and a majority of the voters who vote on the application reject the application, the school district may not submit another application under this paragraph or proceed under par. (am), (b), (bm), or (c), to the extent those paragraphs are applicable to the school district, or under s. 67.05, 67.12, 119.48, 119.49, or 121.91 (3), to the extent those sections are applicable to the school district, for the 730-day period beginning on the date on which the governing body of the school district submitted to the legal voters of the school district the application rejected as described in this subdivision.

AB481,6,5 b. For a school district that experiences a natural disaster, including a fire, that causes the school district's costs to increase, the prohibitions in this subdivision do not apply in the 6-month period immediately following the natural disaster.

AB481,5 Section 5. 24.66 (3) (am) of the statutes is amended to read:

AB481,6,13 24.66 (3) (am) For short-term loans by common, union high and 1st class city school districts. Every application for a loan, the required repayment of which is 10 years or less, shall be approved and authorized for a common, union high, or 1st class city school district under par. (a) or (c), to the extent applicable. If a majority of the legal voters of the school district who vote on an application under this paragraph reject the application, the school district shall be subject to the prohibitions under par. (a) 2. or (c) 4.

AB481,6 Section 6. 24.66 (3) (b) of the statutes is renumbered 24.66 (3) (b) 1. and amended to read:

AB481,6,25 24.66 (3) (b) 1. Every application for a loan, the required repayment of which exceeds 10 years, shall be approved and authorized for a unified school district by a majority vote of the members of the school board at a regular or special meeting of the school board. Every vote so required shall be by ayes and noes duly recorded. In addition, the application shall be approved for a unified school district by a majority vote of the electors of the school district at a special election as provided under sub. (4). If a majority of the legal voters of the school district who vote on an application under this subdivision reject the application or if a majority of the voters who vote at a special election as provided under sub. (4) reject the question, the school district shall be subject to the prohibitions under subd. 2.

AB481,7 Section 7. 24.66 (3) (b) 2. of the statutes is created to read:

AB481,7,10 24.66 (3) (b) 2. a. Except as provided in subd. 2. b., if an application for a loan is submitted to the legal voters of the school district as provided in subd. 1. and a majority of the voters who vote on the application reject the application, or if a majority of the electors of the school district who vote at a special election held as required under sub. (4) reject the question, the school district may not submit another application under this paragraph or proceed under par. (a), (am), (bm), or (c), to the extent applicable, or under s. 67.05, 67.12, 119.48, 119.49, or 121.91 (3), to the extent applicable, for the 730-day period beginning on the date on which the school district first submitted the application to the voters as described in this subdivision.

AB481,7,13 b. For a school district that experiences a natural disaster, including a fire, that causes the school district's costs to increase, the prohibitions in this subdivision do not apply in the 6-month period immediately following the natural disaster.

AB481,8 Section 8. 24.66 (3) (bm) of the statutes is amended to read:

AB481,7,20 24.66 (3) (bm) For short-term loans by unified school districts. Every application for a loan, the required repayment of which is 10 years or less, shall be approved and authorized for a unified school district under par. (b) or (c), to the extent applicable. If a majority of the legal voters of the school district who vote on an application under this paragraph reject the application, the school district shall be subject to the prohibitions under par. (b) 2. or (c) 4.

AB481,9 Section 9. 24.66 (3) (c) 1. of the statutes is amended to read:

AB481,8,2 24.66 (3) (c) 1. If the procedure in par. (a) or (b) is not used for the approval of a school district loan, the required repayment of which is 10 years or less, the governing body of the school district, before any certificate of indebtedness is issued, shall, subject to the prohibitions under subd. 4., adopt and record a resolution specifying the purposes and the maximum amount of the certificate of indebtedness issued.

AB481,10 Section 10. 24.66 (3) (c) 2. of the statutes, as affected by 2015 Wisconsin Act 55, is amended to read:

AB481,9,12 24.66 (3) (c) 2. Unless the purpose and amount of the borrowing have been approved by the electors under s. 67.05 (6a) or considered approved by the electors under s. 67.05 (7) (d) 3., the purpose is to refund any outstanding obligation, the purpose is to pay unfunded prior service liability contributions under the Wisconsin Retirement System if all of the proceeds of the note will be used for that purpose, or the borrowing would not be subject to a referendum as a bond issue under s. 67.05 (7) (cc), (er), (h), or (i), or s. 67.12 (12) (e) 2g., (f), or (h) applies, and provided the school board is not prohibited from adopting a resolution by subd. 4., the school district clerk shall, within 10 days after a governing body of a school district adopts a resolution as described above in subd. 1. to issue a certificate of indebtedness, publish notice of such adoption as a class 1 notice, under ch. 985. Alternatively, the notice may be posted as provided under s. 10.05. The notice need not set forth the full contents of the resolution, but shall state the maximum amount proposed to be borrowed, the purpose thereof, that the resolution was adopted under this subsection, and the place where, and the hours during which, the resolution may be inspected. If, within 30 days after publication or posting, a petition conforming to the requirements of s. 8.40 is filed with the school district clerk for a referendum on the resolution signed by at least 7,500 electors of the district or at least 20 percent of the number of district electors voting for governor at the last general election, as determined under s. 115.01 (13), whichever is the lesser, then the resolution shall not be effective unless adopted by a majority of the district electors voting at the referendum. The referendum shall be called in the manner provided under s. 67.05 (6a), except that the question which appears on the ballot shall be "Shall .... (name of district) borrow the sum of $.... for (state purpose) by issuing its general obligation promissory note (or notes) under section 24.66 (3) of the Wisconsin Statutes?". If a governing body of a school district adopts a resolution to borrow a sum of money under this subsection and a sufficient petition for referendum is not filed within the time permitted, then the power of the governing body of a school district to borrow the sum and expend the sum for the purpose stated shall be deemed approved by the school district electors upon the expiration of the time for filing the petition. If a majority of the school district electors who vote on a referendum held under this subdivision reject the resolution, the governing body shall be subject to the prohibitions in subd. 4.