LRB-3220/1
MJL/MES/RAC/PG:cmh&kmg:km
1999 - 2000 LEGISLATURE
September 14, 1999 - Introduced by Senators Burke, Grobschmidt and
Rosenzweig, cosponsored by Representatives Krug, Riley, Urban, Krusick,
Sykora, Richards, Goetsch, La Fave, Sinicki, Colon, Plale, Plouff and
Wasserman. Referred to Committee on Education.
SB231,1,11
1An Act to repeal 20.255 (2) (ec), 119.71 (2), 119.75 (2) (a), 119.78 (2), 121.85 (6)
2(b) 1. and 121.85 (6) (f);
to renumber 119.78 (1);
to renumber and amend
3119.75 (2) (b);
to amend 20.445 (3) (md), 66.431 (5) (a) 4. c., 73.0305, 119.24,
4119.71 (3), 119.72 (5), 119.74 (intro.), 119.80 (1), 119.80 (1m), 119.82 (3), 121.004
5(7) (a) (intro.), 121.05 (1) (a) 11., 121.07 (6) (a) (intro.), 121.58 (5), 121.85 (6) (a)
6(intro.), 121.85 (6) (a) 2. and 121.85 (7); and
to create 20.255 (2) (kp), 49.175
7(1) (z), 66.431 (5) (a) 4. d., 66.431 (5m), 119.80 (4), 121.004 (7) (f), 121.85 (6) (am),
8121.85 (6) (ar), 121.85 (6m), 121.87 (3) and 121.90 (1) (e) of the statutes;
9relating to: intradistrict transfer aid, bonding for construction of and capital
10improvements to schools in Milwaukee Public Schools and making an
11appropriation.
Analysis by the Legislative Reference Bureau
Under current law, Milwaukee Public Schools (MPS) must establish
geographical areas (attendance areas) within MPS for designating the elementary,
middle, high or other school that pupils residing in the attendance area would
normally attend. Current law also requires each school in MPS to be open to pupils
residing in the attendance area established for that school. A pupil may attend a
school in an attendance area other than the one in which he or she resides with the
written permission of the superintendent of schools.
This bill provides that, beginning in the 2000-01 school year, the MPS board
must provide spaces in each school for pupils who reside outside the attendance area
for the school, but must fill any unused spaces with pupils who reside in the
attendance area. A pupil who attends a school may continue to attend that school
until he or she graduates from the school; in addition, the MPS board must give each
sibling of that pupil priority over other pupils in the process of admission for that
school.
Under current law, the integration aid program (commonly known as chapter
220) transfers pupils between school districts and between schools to promote racial
integration. In addition to receiving interdistrict transfer aid under chapter 220, the
MPS board receives intradistrict transfer aid for each minority pupil who is
transferred from an attendance area where minority pupils comprise 30% or more
of the population to an attendance area that has less than a 30% minority pupil
population and for each nonminority pupil who is transferred from a nonminority
attendance area (less than 30% minority) to a minority attendance area (30% or more
minority). The aid MPS receives is calculated by multiplying the number of eligible
transfer pupils by 0.25 and then multiplying this product by MPS's equalization aid
payment per pupil for the current school year.
This bill provides that the MPS board may not receive intradistrict transfer aid
for a certain percentage of pupils who are transferred from one attendance area to
another without the written permission of a parent or guardian. More specifically,
in the 2000-01 school year, MPS may not receive aid for that percentage of
intradistrict transfer pupils below 75% (target percentage) who are transferred
without parental permission. In the 2001-02 school year, the target percentage is
80%, in the 2002-03 school year, the target percentage is 90% and in the 2004-5
school year and subsequent school years, the target percentage is 100%. The MPS
board must report annually to the legislature the number, percentage, race, sex,
grade and attendance area of pupils transferred between attendance areas without
written, parental consent.
Under the current "Blight Elimination and Slum Clearance Act", a
redevelopment authority is created in every city, village and town in which slum and
blighted areas exist to engage in blight elimination, slum clearance and urban
renewal programs. The powers of such redevelopment authorities include the power
to carry out redevelopment and urban renewal projects, to acquire real or personal
property for such projects and to borrow money and issue bonds in connection with
such projects. Generally, a redevelopment authority's bonds are payable, with
respect to interest and principal, solely from the income or revenues derived from or
in connection with the authority's projects or activities.
Under the bill, the redevelopment authority in the city of Milwaukee is
specifically authorized to issue up to $200,000,000 in bonds to be used to finance
capital improvements at the request of the MPS board. The MPS board may use
intradistrict transfer aid to pay debt service on the bonds. If the MPS board decides
to use the aid to pay the debt service, it must request the department of public
instruction (DPI) to remit the aid to the redevelopment authority in an annual
amount agreed to by the MPS board and DPI. The bill also guarantees the MPS
board the amount of intradistrict transfer aid that it received in the 1998-99 school
year (adjusted for inflation for the years since the 1998-99 school year), reduced by
aid for those pupils transferred without consent, or the amount of intradistrict
transfer aid to which the MPS board is entitled, reduced by aid for those pupils
transferred without consent, whichever is greater. This guarantee expires in the
first fiscal year following the last principal and interest payment on the
redevelopment authority bonds or, if no bonds are issued, within five years of the
effective date of this bill.
In addition, the $200,000,000 in bonds that are authorized in the bill are subject
to a "state moral obligation pledge". This pledge provides that if there are not
sufficient funds in debt service reserve funds for the repayment of the bonds, "the
legislature expresses its expectation and aspiration" that it will make an
appropriation to restore the sufficiency of the debt service reserve funds. The bonds
would be subject to the "state moral obligation pledge" only if the secretary of
administration determines, among other things, that there is a reasonable likelihood
that the bonds will be repaid without the necessity of drawing on funds in the debt
service reserve funds.
This bill also requests the joint legislative council to conduct a study of the
chapter 220 program and to report its findings, conclusions and recommendations
to the legislature by January 1, 2000 and requires the MPS board to submit a report
to the joint committee on finance by May 1, 2000, on the board's strategy for
expanding or renovating neighborhood schools and for decreasing the percentage of
intradistrict transfer pupils transferred without parental consent. The joint
committee on finance must approve the report, and any modifications to the report,
by September 1, 2000. DPI may not distribute any intradistrict transfer aid to the
MPS board until this approval.
Under current law, a pupil who transfers from one school district to another
under chapter 220 is counted as one pupil for state aid and revenue limit purposes
by the school district in which the pupil resides. This bill provides that beginning
in the 2001-02 school year each transfer pupil is counted by the school district in
which he or she resides as one-half pupil for state aid and revenue limit purposes.
Under current law, DPI distributes funds to MPS for a variety of early childhood
education programs. DPI's appropriation for this purpose is funded with general
purpose revenues. This bill funds two of these programs with moneys from the
federal temporary assistance for needy families block grant. No state or federal aid
is directly provided for the other programs, but the bill specifies the minimum
amount the MPS board must spend for each program.
For further information see the state and 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:
SB231, s. 1
1Section
1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
2the following amounts for the purposes indicated:
-
See PDF for table ![PDF](https://docs.legis.wisconsin.gov/assets/image/file_acrobat.gif)
SB231, s. 2
3Section
2. 20.255 (2) (ec) of the statutes is repealed.
SB231, s. 3
4Section
3. 20.255 (2) (kp) of the statutes is created to read:
SB231,4,95
20.255
(2) (kp)
Aid to Milwaukee Public Schools; federal block grant aids. The
6amounts in the schedule for aid to the school district operating under ch. 119 under
7ss. 119.72 and 119.82, to be distributed according to the spending plan under s.
8119.80. All moneys transferred from the appropriation account under s. 20.445 (3)
9(md) shall be credited to this appropriation.
SB231, s. 4
10Section
4. 20.445 (3) (md) of the statutes is amended to read:
SB231,4,1411
20.445
(3) (md)
Federal block grant aids. All block grant moneys received from
12the federal government or any of its agencies to be expended as aids to individuals
13or organizations and to be transferred to the appropriation accounts under
s. ss.
1420.255 (2) (kp) and 20.435 (3) (kc) and (kd), (7) (kw) and (ky) and (8) (kx).
SB231, s. 5
15Section
5. 49.175 (1) (z) of the statutes is created to read:
SB231,5,2
149.175
(1) (z)
Aid to Milwaukee Public Schools. For aid to the school district
2operating under ch. 119 under ss. 119.72 and 119.82, $1,410,000 in each fiscal year.
SB231, s. 6
3Section
6. 66.431 (5) (a) 4. c. of the statutes is amended to read:
SB231,6,234
66.431
(5) (a) 4. c. To issue bonds in its discretion to finance its activities under
5this section, including the payment of principal and interest upon any advances for
6surveys and plans, and may issue refunding bonds for the payment or retirement of
7such bonds previously issued by it.
Such Except for bonds described under subd. 4.
8d., such bonds shall be made payable, as to both principal and interest, solely from
9the income, proceeds, revenues, and funds of the authority derived from or held in
10connection with its undertaking and carrying out of projects or activities under this
11section; provided that payment of such bonds, both as to principal and interest, may
12be further secured by a pledge of any loan, grant or contribution from the federal
13government or other source, in aid of any projects or activities of the authority under
14this section, and by a mortgage of any such projects or activities, or any part thereof.
15Bonds issued under this section shall not constitute an indebtedness within the
16meaning of any constitutional or statutory debt limitation or restriction of the state,
17city or of any public body other than the authority issuing the bonds, and shall not
18be subject to any other law or charter relating to the authorization, issuance or sale
19of bonds. Bonds issued under this section are declared to be issued for an essential
20public and governmental purpose and, together with interest thereon and income
21therefrom, shall be exempt from all taxes. Bonds issued under this section shall be
22authorized by resolution of the authority and may be issued in one or more series and
23shall bear such date, be payable upon demand or mature at such time, bear interest
24at such rate, be in such denomination, be in such form either with or without coupon
25or registered, carry such conversion or registration privileges, have such rank or
1priority, be payable in such medium of payment, at such place, and be subject to such
2terms of redemption, with or without premium, be secured in such manner, and have
3such other characteristics, as is provided by the resolution, trust indenture or
4mortgage issued pursuant thereto. Bonds issued under this section shall be executed
5as provided in s. 67.08 (1) and may be registered under s. 67.09. The bonds may be
6sold or exchanged at public sale or by private negotiation with bond underwriters as
7the authority may provide. The bonds may be sold or exchanged at such price or
8prices as the authority shall determine. If sold or exchanged at public sale, the sale
9shall be held after a class 2 notice, under ch. 985, published prior to such sale in a
10newspaper having general circulation in the city and in such other medium of
11publication as the authority determines. Such bonds may be sold to the federal
12government at private sale, without publication of any notice, at not less than par,
13and, if less than all of the authorized principal amount of such bonds is sold to the
14federal government, the balance may be sold at private sale at not less than par at
15an interest cost to the authority of not to exceed the interest cost to the authority of
16the portion of the bonds sold to the federal government. Any provision of any law to
17the contrary notwithstanding, any bonds issued pursuant to this section shall be
18fully negotiable. In any suit, action or proceeding involving the validity or
19enforceability of any bond issued under this section or the security therefor, any such
20bond reciting in substance that it has been issued by the authority in connection with
21a project or activity under this section shall be conclusively deemed to have been
22issued for such purpose and such project or activity shall be conclusively deemed to
23have been planned, located and carried out in accordance with this section.
SB231, s. 7
24Section
7. 66.431 (5) (a) 4. d. of the statutes is created to read:
SB231,7,9
166.431
(5) (a) 4. d. Subject to sub. (5m), the authority of a 1st class city may
2issue up to $200,000,000 in bonds to finance capital improvements at the request of
3the board of school directors of the school district operating under ch. 119 to
4implement the report approved under 1999 Wisconsin Act .... (this act), section 38 (2)
5(b). Bonds issued under this subd. 4. d. may not have a maturity in excess of 20 years,
6and may not be issued later than the first day of the 60th month beginning after the
7effective date of this subdivision 4. d. .... [revisor inserts date]. Principal and interest
8payments on bonds issued under this subd. 4. d. may be paid by the board of school
9directors of the school district operating under ch. 119.
SB231, s. 8
10Section
8. 66.431 (5m) of the statutes is created to read:
SB231,7,1611
66.431
(5m) Special debt service reserve funds. (a)
Designation of special
12debt service reserve funds. The authority may designate one or more accounts in
13funds created under s. 66.066 (2) (e) as special debt service reserve funds if, prior to
14each issuance of bonds to be secured by the special debt service reserve fund, the
15secretary of administration determines that all of the following conditions are met
16with respect to the bonds described under sub. (5) (a) 4. d.:
SB231,7,1817
1. `Purpose.'
The proceeds of the bonds, other than refunding bonds, will be
18used for public school facilities in the school district operating under ch. 119.
SB231,7,2219
2. `Feasibility.' There is a reasonable likelihood that the bonds will be repaid
20without the necessity of drawing on funds in the special debt service reserve fund
21that secures the bonds. The secretary of administration may make this
22determination of reasonable likelihood only after considering all of the following:
SB231,7,2423
a. Whether a pledge of the revenues of the school district operating under ch.
24119 is made under the bond resolution.
SB231,8,2
1b. How the revenues of the school district operating under ch. 119 are pledged
2to the payment of the bonds.
SB231,8,43
c. The proposed interest rates of the bonds and the resulting cash-flow
4requirements.
SB231,8,75
d. The projected ratio of annual revenues from the school district operating
6under ch. 119 to annual debt service of the authority, taking into account capitalized
7interest.
SB231,8,108
e. Whether an understanding exists providing for repayment by the authority
9to the state of all amounts appropriated to the special debt service reserve fund
10pursuant to par. (g).
SB231,8,1311
f. Whether the authority has agreed that the department of administration will
12have direct and immediate access, at any time and without notice, to all records of
13the authority relating to the bonds.
SB231,8,1614
3. `Limit on bonds issued.' The amount of all bonds, other than refunding
15bonds, that would be secured by all special debt service reserve funds of the authority
16will not exceed $200,000,000.
SB231,8,1817
4. `Refunding bonds.' All refunding bonds to be secured by the special debt
18service reserve fund meet all of the following conditions:
SB231,8,2019
a. The refunding bonds are to be issued to fund, refund or advance refund bonds
20secured by a special debt service reserve fund.
SB231,8,2221
b. The refunding of bonds by the refunding bonds will not adversely affect the
22risk that the state will be called on to make a payment under par. (g).
SB231,9,323
5. `Approval of outstanding debt.' All outstanding debt of the authority relating
24to the bonds has been reviewed and approved by the secretary of administration. In
25determining whether to approve outstanding debt under this subdivision, the
1secretary may consider any factor which the secretary determines to have a bearing
2on whether the state moral obligation pledge under par. (g) should be granted with
3respect to an issuance of bonds.
SB231,9,64
6. `Financial reports.' The authority has agreed to provide to the department
5of administration all financial reports of the authority and all regular monthly
6statements of any trustee of the bonds on a direct and ongoing basis.
SB231,9,137
(b)
Payment of funds into a special debt service reserve fund. The authority
8shall pay into any special debt service reserve fund of the authority any moneys
9appropriated and made available by the state for the purposes of the special debt
10service reserve fund, any proceeds of a sale of bonds described under sub. (5) (a) 4.
11d. to the extent provided in the bond resolution authorizing the issuance of the bonds
12and any other moneys that are made available to the authority for the purpose of the
13special debt service reserve fund from any other source.
SB231,9,2514
(c)
Use of moneys in the special debt service reserve fund. All moneys held in
15any special debt service reserve fund of the authority, except as otherwise specifically
16provided, shall be used solely for the payment of the principal of bonds secured in
17whole or in part by the special debt service reserve fund, the making of sinking fund
18payments with respect to these bonds, the purchase or redemption of these bonds,
19the payment of interest on these bonds or the payment of any redemption premium
20required to be paid when these bonds are redeemed prior to maturity. If moneys in
21a special debt service reserve fund at any time are less than the special debt service
22reserve fund requirement under par. (e) for the special debt service reserve fund, the
23authority may not use these moneys for any optional purchase or optional
24redemption of the bonds. Any income or interest earned by, or increment to, any
25special debt service reserve fund due to the investment of moneys in the special debt
1service reserve fund may be transferred by the authority to other funds or accounts
2of the authority relating to the bonds to the extent that the transfer does not reduce
3the amount of the special debt service reserve fund below the special debt service
4reserve fund requirement under par. (e) for the special debt service reserve fund.
SB231,10,125
(d)
Limitation on bonds secured by a special debt service reserve fund. The
6authority shall accumulate in each special debt service reserve fund an amount equal
7to the special debt service reserve fund requirement under par. (e) for the special debt
8service reserve fund. The authority may not at any time issue bonds secured in whole
9or in part by a special debt service reserve fund if upon the issuance of these bonds
10the amount in the special debt service reserve fund will be less than the special debt
11service reserve fund requirement under par. (e) for the special debt service reserve
12fund.
SB231,11,313
(e)
Special debt service reserve fund requirement. The special debt service
14reserve fund requirement for a special debt service reserve fund, as of any particular
15date of computation, is equal to an amount of money, as provided in the bond
16resolution authorizing the bonds with respect to which the special debt service
17reserve fund is established, that may not exceed the maximum annual debt service
18on the bonds of the authority for that fiscal year or any future fiscal year of the
19authority secured in whole or in part by that special debt service reserve fund. In
20computing the annual debt service for any fiscal year, bonds deemed to have been
21paid in accordance with the defeasance provisions of the bond resolution authorizing
22the issuance of the bonds shall not be included in bonds outstanding on such date of
23computation. The annual debt service for any fiscal year is the amount of money
24equal to the aggregate of all of the following calculated on the assumption that the
25bonds will, after the date of computation, cease to be outstanding by reason, but only
1by reason, of the payment of bonds when due, and the payment when due, and
2application in accordance with the bond resolution authorizing those bonds, of all of
3the sinking fund payments payable at or after the date of computation:
SB231,11,64
1. All interest payable during the fiscal year on all bonds that are secured in
5whole or in part by the special debt service reserve fund and that are outstanding on
6the date of computation.
SB231,11,97
2. The principal amount of all of the bonds that are secured in whole or in part
8by the special debt service reserve fund, are outstanding on the date of computation
9and mature during the fiscal year.
SB231,11,1310
3. All amounts specified in bond resolutions of the authority authorizing any
11of the bonds that are secured in whole or in part by the special debt service reserve
12fund to be payable during the fiscal year as a sinking fund payment with respect to
13any of the bonds that mature after the fiscal year.
SB231,11,1714
(f)
Valuation of securities. In computing the amount of a special debt service
15reserve fund for the purposes of this subsection, securities in which all or a portion
16of the special debt service reserve fund is invested shall be valued at par, or, if
17purchased at less than par, at their cost to the authority.
SB231,12,618
(g)
State moral obligation pledge. If at any time of valuation the special debt
19service reserve fund requirement under par. (e) for a special debt service reserve fund
20exceeds the amount of moneys in the special debt service reserve fund, the authority
21shall certify to the secretary of administration, the governor and the joint committee
22on finance the amount necessary to restore the special debt service reserve fund to
23an amount equal to the special debt service reserve fund requirement under par. (e)
24for the special debt service reserve fund. If this certification is received by the
25secretary of administration in an even-numbered year prior to the completion of the
1budget compilation under s. 16.43, the secretary shall include the certified amount
2in the budget compilation. In any case, the joint committee on finance shall introduce
3in either house, in bill form, an appropriation of the amount so certified to the
4appropriate special debt service reserve fund of the authority. Recognizing its moral
5obligation to do so, the legislature hereby expresses its expectation and aspiration
6that, if ever called upon to do so, it shall make this appropriation.
SB231, s. 9
7Section
9. 73.0305 of the statutes is amended to read:
SB231,12,14
873.0305 Revenue limits calculations. The department of revenue shall
9annually determine and certify to the state superintendent of public instruction, no
10later than the 4th Monday in June, the allowable rate of increase
for the limit
11imposed under
s. 121.85 (6) (ar) and subch. VII of ch. 121. For that limit, the
12allowable rate of increase is the percentage change in the consumer price index for
13all urban consumers, U.S. city average, between the preceding March 31 and the 2nd
14preceding March 31, as computed by the federal department of labor.