AB508: Bill Text

LRB-3259/1

FFK:jld:rs

2011 - 2012 LEGISLATURE

2011 Assembly BILL 508

February 1, 2012 - Introduced by Representatives Krug, Bernier, Endsley, Kerkman, Petryk, Steineke and Strachota, cosponsored by Senators Olsen and Holperin. Referred to Joint Committee on Finance.

AB508,1,11 An Act to repeal 231.01 (3c), 231.01 (3m) and 231.01 (5r); to amend 66.0621 (1) (b), 231.01 (4) (a), 231.01 (4) (b) 1., 231.01 (4) (b) 2., 231.01 (4) (b) 5., 231.01 (4) (c), 231.01 (7) (a) 1., 231.01 (7) (a) 2., 231.01 (7) (a) 4., 231.01 (7) (c), 231.02 (6) (b), 231.03 (5), 231.03 (6) (b), 231.03 (6) (g), 231.03 (7), 231.03 (8), 231.03 (11), 231.03 (13), 231.03 (14), 231.03 (15), 231.03 (16), 231.03 (17), 231.03 (18), 231.03 (19), 231.04, 231.05 (1), 231.06, 231.07 (1) (b), 231.07 (2) (a), 231.08 (3), 231.08 (5), 231.10 (1), 231.12, 231.13 (1) (intro.), 231.13 (2), 231.16 (1), 231.16 (3), 231.20 and 231.23; and to create 231.01 (5) (a) 7., 231.01 (5n), 231.01 (5p), 231.01 (6m), 231.03 (6) (j) and 231.03 (6) (k) of the statutes; relating to: authorizing the Wisconsin Health and Educational Facilities Authority to issue bonds to finance projects related to nonprofit facilities.

Analysis by the Legislative Reference Bureau

Under current law, the Wisconsin Health and Educational Facilities Authority (WHEFA) may issue bonds to finance certain projects of health, educational, or research institutions; to refinance outstanding debt of health, educational, or research institutions; and to finance a purchase of the state's right to receive any of the payments under the Attorneys General Master Tobacco Settlement Agreement of November 23, 1998. Projects of health, educational, or research institutions that may be financed include, among others, the acquisition of a hospital, the construction or operation of an ambulatory surgery center or home health agency, and the construction, remodeling, furnishing, or equipping of a health, educational, or research facility or related structure.

This bill authorizes WHEFA to issue bonds to finance any project undertaken by a nonprofit institution for a nonprofit facility, or to refinance outstanding debt of a nonprofit institution. A nonprofit institution is defined in the bill as a nonprofit entity that is not a health, education, or research institution. A nonprofit facility is defined in the bill as a facility that is owned or operated by a nonprofit entity. Project activities for which WHEFA may issue bonds for a nonprofit institution include construction, acquisition, remodeling, furnishing, and equipping of nonprofit facilities, related structures, and structures or items that are useful for the operation of nonprofit facilities.

This bill also makes the following changes to WHEFA's bonding authority:

1. Extends the maximum bond maturity date for bonds issued by WHEFA from 30 years from the date of issue to 50 years from the date of issue.

2. Eliminates the requirement the certain refinancing projects for health institutions be certified by the Department of Health Services.

3. Changes the working capital limits that must be included in the cost of a project to be consistent with federal law.

4. Eliminates references to WHEFA's authority to issue bonds to participating child care providers which expired on May 1, 2000.

For further information see the state 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:

AB508, s. 1 Section 1. 66.0621 (1) (b) of the statutes is amended to read:

AB508,3,3 66.0621 (1) (b) "Public utility" means any revenue producing facility or enterprise owned by a municipality and operated for a public purpose as defined in s. 67.04 (1) (b) including garbage incinerators, toll bridges, swimming pools, tennis courts, parks, playgrounds, golf links, bathing beaches, bathhouses, street lighting, city halls, village halls, town halls, courthouses, jails, schools, cooperative educational service agencies, hospitals, homes for the aged or indigent, child care centers, as defined in s. 231.01 (3c), regional projects, waste collection and disposal operations, sewerage systems, local professional baseball park facilities, local professional football stadium facilities, local cultural arts facilities, and any other necessary public works projects undertaken by a municipality.

AB508, s. 2 Section 2. 231.01 (3c) of the statutes is repealed.

AB508, s. 3 Section 3. 231.01 (3m) of the statutes is repealed.

AB508, s. 4 Section 4. 231.01 (4) (a) of the statutes is amended to read:

AB508,3,14 231.01 (4) (a) "Cost" means the sum of all costs incurred by a participating health institution, participating educational institution, participating research institution, or participating child care provider nonprofit institution, as approved by the authority, as are reasonable and necessary to accomplish the project, exclusive of any private or federal, state, or local financial assistance received by the participating health institution, participating educational institution, participating research institution, or participating child care provider nonprofit institution for the payment of the project cost.

AB508, s. 5 Section 5. 231.01 (4) (b) 1. of the statutes is amended to read:

AB508,3,24 231.01 (4) (b) 1. The cost incurred by or on behalf of the participating health institution, participating educational institution, participating research institution, or participating child care provider nonprofit institution of all necessary developmental, planning, and feasibility studies, surveys, plans, and specifications, architectural, engineering, legal, or other special services, the cost of acquisition of land and any buildings and improvements on the land, site preparation, and development including demolition or removal of existing structures, construction, reconstruction, and equipment, including machinery, fixed equipment, and personal property.

AB508, s. 6 Section 6. 231.01 (4) (b) 2. of the statutes is amended to read:

AB508,4,4 231.01 (4) (b) 2. The reasonable cost of financing incurred by a participating health institution, participating educational institution, participating research institution, or participating child care provider nonprofit institution in the course of the development of the project to the occupancy date.

AB508, s. 7 Section 7. 231.01 (4) (b) 5. of the statutes is amended to read:

AB508,4,8 231.01 (4) (b) 5. Working capital not exceeding 3% of the estimated total project cost or 3% of the actual total final cost, whichever is larger the amounts permitted under 26 CFR 1.148-6 (d) (3).

AB508, s. 8 Section 8. 231.01 (4) (c) of the statutes is amended to read:

AB508,4,17 231.01 (4) (c) All rents and other net revenues from the operation of the real property, improvements, or personal property on the project site by a participating health institution, participating educational institution, participating research institution, or participating child care provider nonprofit institution on and after the date on which the contract between a participating health institution, participating educational institution, participating research institution, or participating child care provider nonprofit institution and the authority was entered into, but prior to the occupancy date, shall reduce the sum of all costs in this subsection.

AB508, s. 9 Section 9. 231.01 (5) (a) 7. of the statutes is created to read:

AB508,4,22 231.01 (5) (a) 7. Any hospital, ambulatory surgical center, skilled nursing facility, community-based residential facility, assisted living facility, home health agency, hospice, rehabilitation facility, medical office or clinic, or other similar facility that is located outside of this state.

AB508, s. 10 Section 10. 231.01 (5n) of the statutes is created to read:

AB508,5,3 231.01 (5n) "Nonprofit entity" means an entity that is described in section 501 (c) (3) of the Internal Revenue Code and that is exempt from federal income tax under section 501 (a) of the Internal Revenue Code.

AB508, s. 11 Section 11. 231.01 (5p) of the statutes is created to read:

AB508,5,6 231.01 (5p) "Nonprofit facility" means a facility that is owned or operated by a nonprofit entity.

AB508, s. 12 Section 12. 231.01 (5r) of the statutes, as affected by 2011 Wisconsin Act 32, is repealed.

AB508, s. 13 Section 13. 231.01 (6m) of the statutes is created to read:

AB508,5,14 231.01 (6m) "Participating nonprofit institution" means a nonprofit entity, or an affiliate of that entity, that undertakes the financing and construction or acquisition of a project or undertakes the refunding or refinancing of obligations or of a mortgage or of advances as provided in this chapter, and is not any of the following:

AB508,5,17 1. An entity authorized by state law to provide or operate an educational facility or an affiliate of an entity authorized by state law to provide or operate an educational facility.

AB508,5,19 2. An entity authorized by state law to provide or operate a health facility or an affiliate of an entity authorized by state law to provide or operate a health facility.

AB508,5,22 3. An entity authorized by state law to provide or operate a research facility or an affiliate of an entity authorized by state law to provide or operate a research facility.

AB508, s. 14 Section 14. 231.01 (7) (a) 1. of the statutes is amended to read:

AB508,6,2 231.01 (7) (a) 1. A specific health facility, educational facility, research facility, or child care center nonprofit facility work or improvement to be refinanced, acquired, constructed, enlarged, remodeled, renovated, improved, furnished, or equipped by the authority with funds provided in whole or in part under this chapter.

AB508, s. 15 Section 15. 231.01 (7) (a) 2. of the statutes is amended to read:

AB508,6,9 231.01 (7) (a) 2. One or more structures suitable for use as a child care center, research facility, nonprofit facility, health facility, laboratory, laundry, nurses' or interns' residence or other multi-unit housing facility for staff, employees, patients or relatives of patients admitted for treatment or care in a health facility, physician's facility, administration building, research facility, maintenance, storage, or utility facility.

AB508, s. 16 Section 16. 231.01 (7) (a) 4. of the statutes is amended to read:

AB508,6,15 231.01 (7) (a) 4. Any structure useful for the operation of a health facility, educational facility, research facility, or child care center nonprofit facility, including facilities or supporting service structures essential or convenient for the orderly conduct of the health facility, educational facility, research facility, or child care center nonprofit facility.

AB508, s. 17 Section 17. 231.01 (7) (c) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read: