SB1, s. 138 5Section 138. 18.06 (8) (a) of the statutes is renumbered 18.06 (8) (a) (intro.)
6and amended to read:
SB1,66,147 18.06 (8) (a) (intro.) The Subject to pars. (am) and (ar), at the time of, or in
8anticipation of, contracting public debt and at any time thereafter while the public
9debt is outstanding, the
commission may enter into agreements and ancillary
10arrangements for relating to the public debt, including liquidity facilities,
11remarketing or dealer agreements, letter of credit agreements, insurance policies,
12guaranty agreements, reimbursement agreements, indexing agreements , or interest
13exchange agreements. The commission shall determine all of the following, if
14applicable, with respect to any such agreement or ancillary arrangement:
SB1, s. 139 15Section 139. 18.06 (8) (a) 1. of the statutes is created to read:
SB1,66,1816 18.06 (8) (a) 1. For any payment to be received with respect to the agreement
17or ancillary arrangement, whether the payment will be deposited into the bond
18security and redemption fund or the capital improvement fund.
SB1, s. 140 19Section 140. 18.06 (8) (a) 2. of the statutes is created to read:
SB1,66,2320 18.06 (8) (a) 2. For any payment to be made with respect to the agreement or
21ancillary arrangement, whether the payment will be made from the bond security
22and redemption fund or the capital improvement fund and the timing of any transfer
23of funds.
SB1, s. 141 24Section 141. 18.06 (8) (am) of the statutes is created to read:
SB1,67,2
118.06 (8) (am) With respect to any interest exchange agreement or agreements
2specified in par. (a), all of the following shall apply:
SB1,67,53 1. The commission shall contract with an independent financial consulting firm
4to determine if the terms and conditions of the agreement reflect a fair market value,
5as of the proposed date of the execution of the agreement.
SB1,67,96 2. The interest exchange agreement must identify by maturity, bond issue, or
7bond purpose the debt or obligation to which the agreement is related. The
8determination of the commission included in an interest exchange agreement that
9such agreement relates to a debt or obligation shall be conclusive.
SB1,67,1410 3. The resolution authorizing the commission to enter into any interest
11exchange agreement shall require that the terms and conditions of the agreement
12reflect a fair market value as of the date of execution of the agreement, as reflected
13by the determination of the independent financial consulting firm under subd. 1.,
14and shall establish guidelines for any such agreement, including the following:
SB1,67,1515 a. The conditions under which the commission may enter into the agreements.
SB1,67,1616 b. The form and content of the agreements.
SB1,67,1717 c. The aspects of risk exposure associated with the agreements.
SB1,67,1818 d. The standards and procedures for counterparty selection.
SB1,67,2019 e. The standards for the procurement of, and the setting aside of reserves, if
20any, in connection with, the agreements.
SB1,67,2221 f. The provisions, if any, for collateralization or other requirements for securing
22any counterparty's obligations under the agreements.
SB1,67,2423 g. A system for financial monitoring and periodic assessment of the
24agreements.
SB1, s. 142 25Section 142. 18.06 (8) (ar) of the statutes is created to read:
SB1,68,3
118.06 (8) (ar) 1. Subject to subd. 2., the terms and conditions of an interest
2exchange agreement under par. (a) shall not be structured so that, as of the trade date
3of the agreement, both of the following are reasonably expected to occur:
SB1,68,84 a. The aggregate expected debt service and net exchange payments relating to
5the agreement during the fiscal year in which the trade date occurs will be less than
6the aggregate expected debt service and net exchange payments relating to the
7agreement that would be payable during that fiscal year if the agreement is not
8executed.
SB1,68,129 b. The aggregate expected debt service and net exchange payments relating to
10the agreement in subsequent fiscal years will be greater than the aggregate expected
11debt service and net exchange payments relating to the agreement that would be
12payable in those fiscal years if the agreement is not executed.
SB1,68,1313 2. Subd. 1. shall not apply if either of the follow occurs:
SB1,68,1714 a. The commission receives a determination by the independent financial
15consulting firm under par. (am) 1. that the terms and conditions of the agreement
16reflect payments by the state that represent on-market rates as of the trade date for
17the particular type of agreement.
SB1,68,2218 b. The commission provides written notice to the joint committee on finance of
19its intention to enter into an agreement that is reasonably expected to satisfy subd.
201., and the joint committee on finance either approves or disapproves, in writing, the
21commission's entering into the agreement within 14 days of receiving the written
22notice from the commission.
SB1,68,2523 3. This paragraph shall not limit the liability of the state under an agreement
24if actual contracted net exchange payments in any fiscal year are less than or exceed
25original expectations.
SB1, s. 143
1Section 143. 18.06 (8) (b) of the statutes is amended to read:
SB1,69,42 18.06 (8) (b) The commission may delegate to other persons the authority and
3responsibility to take actions necessary and appropriate to implement agreements
4and ancillary arrangements under par. pars. (a) and (am).
SB1, s. 144 5Section 144. 18.06 (8) (d) of the statutes is created to read:
SB1,69,106 18.06 (8) (d) Semiannually, during any year in which the state is a party to an
7agreement entered into pursuant to par. (a) (intro.), the department of
8administration shall submit a report to the commission and to the cochairpersons of
9the joint committee on finance listing all such agreements. The report shall include
10all of the following:
SB1,69,1211 1. A description of each agreement, including a summary of its terms and
12conditions, rates, maturity, and the estimated market value of each agreement.
SB1,69,1413 2. An accounting of amounts that were required to be paid and received on each
14agreement.
SB1,69,1615 3. Any credit enhancement, liquidity facility, or reserves, including an
16accounting of the costs and expenses incurred by the state.
SB1,69,1717 4. A description of the counterparty to each agreement.
SB1,69,1918 5. A description of the counterparty risk, the termination risk, and other risks
19associated with each agreement.
SB1, s. 145 20Section 145. 18.08 (1) (a) of the statutes is renumbered 18.08 (1) (a) (intro.)
21and amended to read:
SB1,70,222 18.08 (1) (a) (intro.) All moneys resulting from the contracting of public debt
23or any payment to be received with respect to any agreement or ancillary
24arrangement entered into under s. 18.06 (8) (a) with respect to any such public debt


1shall be credited to a separate and distinct fund, established in the state treasury,
2designated as the capital improvement fund, except that such:
SB1,70,6 31. Such moneys which represent premium and accrued interest on bonds or
4notes
issued, or are for purposes of funding or refunding bonds pursuant to s. 18.06
5(5), shall be credited to one or more of the sinking funds of the bond security and
6redemption fund or to the state building trust fund.
SB1, s. 146 7Section 146. 18.08 (1) (a) 2. of the statutes is created to read:
SB1,70,128 18.08 (1) (a) 2. Any such moneys that represent premium or any payments
9received pursuant to any agreement or ancillary arrangement entered into under s.
1018.06 (8) (a) with respect to any such public debt may be credited to one or more of
11the sinking funds of the bond security and redemption fund or to the capital
12improvement fund, as determined by the commission.
SB1, s. 147 13Section 147. 18.08 (2) of the statutes is amended to read:
SB1,70,2014 18.08 (2) The capital improvement fund may be expended, pursuant to
15appropriations, only for the purposes and in the amounts for which the public debts
16have been contracted, for the payment of principal and interest on loans or on notes,
17for the payment due, if any, under an agreement or ancillary arrangement entered
18into under s. 18.06 (8) (a) with respect to any such public debt
, for the purposes
19identified under s. 20.867 (2) (v) and (4) (q), and for expenses incurred in contracting
20public debt.
SB1, s. 148 21Section 148. 18.08 (4) of the statutes is amended to read:
SB1,71,522 18.08 (4) If at any time it appears that there will not be on hand in the capital
23improvement fund sufficient moneys for the payment of principal and interest on
24loans or on notes or for the payment due, if any, under an agreement or ancillary
25arrangement that has been entered into under s. 18.06 (8) (a) with respect to any

1public debt and that has been determined to be payable from the capital
2improvement fund under s. 18.06 (8) (a) 2.
, the department of administration shall
3transfer to such fund, out of the appropriation made pursuant to s. 20.866, a sum
4sufficient which, together with any available money on hand in such fund, is
5sufficient to make such payment.
SB1, s. 149 6Section 149. 18.09 (2) of the statutes is amended to read:
SB1,71,137 18.09 (2) Each sinking fund shall be expended, and all moneys from time to
8time on hand therein are irrevocably appropriated, in sums sufficient, only for the
9payment of principal and interest on the bonds giving rise to it and, premium, if any,
10due upon refunding redemption of any such bonds, and payment due, if any, under
11an agreement or ancillary arrangement that has been entered into under s. 18.06 (8)
12(a) with respect to any such bonds and that has been determined to be payable from
13the bond security and redemption fund under s. 18.06 (8) (a) 2
.
SB1, s. 150m 14Section 150m. 18.52 (1c) of the statutes is created to read:
SB1,71,1615 18.52 (1c) "Aggregate expected debt service and net exchange payments"
16means the sum of the following:
SB1,71,1817 (a) The aggregate net payments expected to be made and received under a
18specified interest exchange agreement under s. 18.55 (6) (a).
SB1,71,2019 (b) The aggregate debt service expected to be made on obligations related to
20that agreement.
SB1,71,2321 (c) The aggregate net payments expected to be made and received under all
22other interest exchange agreements under s. 18.55 (6) (a) relating to those
23obligations that are in force at the time of executing the agreement.
SB1, s. 151 24Section 151. 18.55 (6) (a) of the statutes is amended to read:
SB1,72,12
118.55 (6) (a) At Subject to pars. (d) and (e), at the time of, or in anticipation of,
2contracting revenue obligations and at any time thereafter while the revenue
3obligations are outstanding, the commission may enter into agreements and
4ancillary arrangements relating to the revenue obligations, including trust
5indentures, liquidity facilities, remarketing or dealer agreements, letter of credit
6agreements, insurance policies, guaranty agreements, reimbursement agreements,
7indexing agreements, or interest exchange agreements. Any payment made or
8received pursuant to any such agreements or ancillary arrangements shall be made
9from or deposited into a fund relating to the relevant revenue obligation, as
10determined by the commission. The determination of the commission included in an
11interest exchange agreement that such an agreement relates to a revenue obligation
12shall be conclusive.
SB1, s. 151c 13Section 151c. 18.55 (6) (d) of the statutes is created to read:
SB1,72,1514 18.55 (6) (d) With respect to any interest exchange agreement or agreements
15specified in par. (a), all of the following shall apply:
SB1,72,1816 1. The commission shall contract with an independent financial consulting firm
17to determine if the terms and conditions of the agreement reflect a fair market value,
18as of the proposed date of the execution of the agreement.
SB1,72,2219 2. The interest exchange agreement must identify by maturity, bond issue, or
20bond purpose the obligation to which the agreement is related. The determination
21of the commission included in an interest exchange agreement that such agreement
22relates to an obligation shall be conclusive.
SB1,73,223 3. The resolution authorizing the commission to enter into any interest
24exchange agreement shall require that the terms and conditions of the agreement
25reflect a fair market value as of the date of execution of the agreement, as reflected

1by the determination of the independent financial consulting firm under subd. 1.,
2and shall establish guidelines for any such agreement, including the following:
SB1,73,33 a. The conditions under which the commission may enter into the agreements.
SB1,73,44 b. The form and content of the agreements.
SB1,73,55 c. The aspects of risk exposure associated with the agreements.
SB1,73,66 d. The standards and procedures for counterparty selection.
SB1,73,87 e. The standards for the procurement of, and the setting aside of reserves, if
8any, in connection with, the agreements.
SB1,73,109 f. The provisions, if any, for collateralization or other requirements for securing
10any counterparty's obligations under the agreements.
SB1,73,1211 g. A system for financial monitoring and periodic assessment of the
12agreements.
SB1, s. 151h 13Section 151h. 18.55 (6) (e) of the statutes is created to read:
SB1,73,1614 18.55 (6) (e) 1. Subject to subd. 2., the terms and conditions of an interest
15exchange agreement under par. (a) shall not be structured so that, as of the trade date
16of the agreement, both of the following are reasonably expected to occur:
SB1,73,2117 a. The aggregate expected debt service and net exchange payments relating to
18the agreement during the fiscal year in which the trade date occurs will be less than
19the aggregate expected debt service and net exchange payments relating to the
20agreement that would be payable during that fiscal year if the agreement is not
21executed.
SB1,73,2522 b. The aggregate expected debt service and net exchange payments relating to
23the agreement in subsequent fiscal years will be greater than the aggregate expected
24debt service and net exchange payments relating to the agreement that would be
25payable in those fiscal years if the agreement is not executed.
SB1,74,1
12. Subdivision 1. shall not apply if either of the follow occurs:
SB1,74,52 a. The commission receives a determination by the independent financial
3consulting firm under par. (d) 1. that the terms and conditions of the agreement
4reflect payments by the state that represent on-market rates as of the trade date for
5the particular type of agreement.
SB1,74,106 b. The commission provides written notice to the joint committee on finance of
7its intention to enter into an agreement that is reasonably expected to satisfy subd.
81., and the joint committee on finance either approves or disapproves, in writing, the
9commission's entering into the agreement within 14 days of receiving the written
10notice from the commission.
SB1,74,1311 3. This paragraph shall not limit the liability of the state under an agreement
12if actual contracted net exchange payments in any fiscal year are less than or exceed
13original expectations.
SB1, s. 151p 14Section 151p. 18.55 (6) (f) of the statutes is created to read:
SB1,74,1815 18.55 (6) (f) Semiannually, during any year in which the state is a party to an
16agreement entered into pursuant to par. (a), the department of administration shall
17submit a report to the commission and to the cochairpersons of the joint committee
18on finance listing all such agreements. The report shall include all of the following:
SB1,74,2019 1. A description of each agreement, including a summary of its terms and
20conditions, rates, maturity, and the estimated market value of each agreement.
SB1,74,2221 2. An accounting of amounts that were required to be paid and received on each
22agreement.
SB1,74,2423 3. Any credit enhancement, liquidity facility, or reserves, including an
24accounting of the costs and expenses incurred by the state.
SB1,74,2525 4. A description of the counterparty to each agreement.
SB1,75,2
15. A description of the counterparty risk, the termination risk, and other risks
2associated with each agreement.
SB1, s. 151s 3Section 151s. 18.71 (1) of the statutes is renumbered 18.71 (1m).
SB1, s. 151v 4Section 151v. 18.71 (1d) of the statutes is created to read:
SB1,75,65 18.71 (1d) "Aggregate expected debt service and net exchange payments"
6means the sum of the following:
SB1,75,87 (a) The aggregate net payments expected to be made and received under a
8specified interest exchange agreement under s. 18.73 (5) (a).
SB1,75,109 (b) The aggregate debt service expected to be made on notes related to that
10agreement.
SB1,75,1311 (c) The aggregate net payments expected to be made and received under all
12other interest exchange agreements under s. 18.73 (5) (a) relating to those notes that
13are in force at the time of executing the agreement.
SB1, s. 152 14Section 152. 18.73 (5) of the statutes is created to read:
SB1,76,215 18.73 (5) Agreements and arrangements; delegation; use of operating notes.
16(a) Subject to pars. (d) and (e), at the time of, or in anticipation of, contracting
17operating notes and at any time thereafter while the operating notes are
18outstanding, the commission may enter into agreements and ancillary
19arrangements relating to the operating notes, including liquidity facilities,
20remarketing or dealer agreements, letter of credit agreements, insurance policies,
21guaranty agreements, reimbursement agreements, indexing agreements, or interest
22exchange agreements. Any payment received pursuant to any such agreements or
23ancillary arrangements shall be deposited in, and any payments made pursuant to
24any such agreements or ancillary arrangements will be made from, the general fund
25or the operating note redemption fund, as determined by the commission. The

1determination of the commission included in an interest exchange agreement that
2such an agreement relates to an operating note shall be conclusive.
SB1,76,53 (b) The commission may delegate to other persons the authority and
4responsibility to take actions necessary and appropriate to implement agreements
5and ancillary arrangements under par. (a).
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