2023 - 2024 LEGISLATURE
April 11, 2024 - Introduced by Representatives Madison, Hong and Clancy,
cosponsored by Senator Larson. Referred to Committee on Financial
AB1220,1,11 1An Act to repeal 34.045; to amend 13.172 (1), 13.48 (13) (a), 13.62 (2), 13.94 (4)
2(a) 1., 13.95 (intro.), 16.002 (2), 16.004 (4), 16.004 (5), 16.004 (12) (a), 16.045 (1)
3(a), 16.15 (1) (ab), 16.41 (4), 16.417 (1) (b), 16.52 (7), 16.528 (1) (a), 16.53 (2),
416.54 (9) (a) 1., 16.765 (1), 16.765 (2), 16.765 (5), 16.765 (6), 16.765 (7) (intro.),
516.765 (7) (d), 16.765 (8), 16.85 (2), 16.865 (8), 20.907 (5) (e) 12r., 34.03 (2), 34.05
6(4) (intro.), 34.07, 71.26 (1) (be), 77.54 (9a) (a), 100.45 (1) (dm) and 230.03 (3);
7and to create 13.94 (1) (dt), 13.94 (1s) (c) 11., 15.07 (1) (a) 7., 15.07 (2) (n), 15.07
8(3) (bm) 7., 15.07 (5) (g), 15.185 (3), 19.42 (10) (t), 19.42 (13) (s), 20.195, 34.05
9(5), 40.02 (54) (n), 70.11 (38v) and chapter 239 of the statutes; relating to:
10creating an authority to be known as the Public Bank of Wisconsin and making
11an appropriation.
Analysis by the Legislative Reference Bureau
This bill creates an authority known as the Public Bank of Wisconsin (the
Public Bank). The Public Bank is a public body corporate and politic, but is not a
state agency and the state is not liable for its acts or obligations. The Public Bank
must organize as a state-chartered bank supervised by the Division of Banking in

the Department of Financial Institutions and generally accepts deposits only of
public moneys from the state (as described below).
The Public Bank's purpose is to accept and hold deposits of public funds and
utilize those funds in this state to further the Public Bank's goals to do all of the
1. Accomplish the Public Bank's mission by adhering to the following priorities:
institutional safety and soundness; long-term viability; social return and monetary
return on lending and investments; prudent and best banking and business
practices; highest ethical, accountability, and transparency standards; and
insulation from political influence.
2. Support the expansion and development of public and private measures to
mitigate the grave dangers that climate change poses to the public and local
enterprises, and to promote reductions in greenhouse gas emissions.
3. Promote economic development and job creation in this state, and support
the economic well-being and health of this state, by providing affordable financing
to eligible recipients (as discussed below) and small- and medium-sized businesses,
especially in underserved communities.
4. Assist businesses and municipalities in recovering from the economic
repercussions of external shocks, including pandemics, recessions, and natural
5. Respond to the unmet affordable financing needs of local governmental
6. Address the historic and current disadvantages experienced by the state's
minority-owned and women-owned enterprises by providing affordable financing.
7. Assist workers and communities in creating jobs by supporting cooperative
business models including worker-owned cooperatives.
8. Increase available affordable housing options for state residents.
9. Promote sustainable agriculture and address food insecurity, particularly by
providing financing to family-owned farms and rural businesses that serve them.
10. Support nonprofit and community-based organizations that work to
address the results of racial injustice or to promote women's economic and social
11. Provide economic support to state agencies, local governmental units, and
nonprofit organizations, including community development authorities,
redevelopment authorities, housing authorities, and community development
12. Strengthen state-chartered banks, particularly through participatory loan
13. Enable the state to share in the methods of monetary support the federal
government provides to commercial banks.
14. Assist students in need of additional low-cost student loans in financing
the cost of higher education.
Under the bill, an 11-member governing board exercises the powers and duties
of the Public Bank. Board members include the state treasurer, the state
superintendent of public instruction, and the president of the University of

Wisconsin System, or their designees, along with eight members of varying
backgrounds appointed by the governor. Board members are not compensated for
their services but may be reimbursed for expenses. The board must appoint a chief
executive officer (CEO) of the Public Bank and may delegate powers and duties to
the CEO. As the executive and administrative head of the Public Bank, the CEO is
responsible for the Public Bank's management, administration, and legal
The bill generally requires the state to deposit the state's public moneys in the
Public Bank. The required deposits are phased in over a four-year period, with at
least 30 percent of the state's public deposits required to be in the Public Bank by
January 1, 2025, and all of the state's public deposits required to be in the Public
Bank by January 1, 2028, subject to limited exceptions.
Under the bill, with limited exceptions, the Public Bank has all the powers of
a state-chartered bank. Among the exceptions, the Public Bank accepts only state
public deposits and, if the Public Bank is serving as a banker's bank (discussed
below), deposits from state-chartered financial institutions. The Public Bank may
not pay interest on deposit accounts. The Public Bank may accept and solicit
property, including donations, grants, and loans, for any purpose of the Public Bank.
The Public Bank's governing board must operate the Public Bank to ensure its
soundness and sustainability and to accomplish its purposes, but the governing
board may direct the Public Bank's earnings to be added to the Public Bank's capital,
invested in the State Investment Fund managed by the Investment Board, or
distributed to the state. The governing board must regularly review the Public
Bank's financial statements and other records to ensure that the Public Bank is in
compliance with all applicable laws and reporting requirements. The governing
board must also establish technical advisory committees and consult with public and
private sector experts related to the Public Bank's mission, objectives, and duties.
The governing board, along with the secretary of administration, must ensure that
the Public Bank maintains at all times cash or demand deposits in an amount needed
to meet the operational needs of the state.
The bill authorizes or requires specific activities of the Public Bank, including
all of the following:
1. The Public Bank must use its powers to extend affordable financing to
eligible recipients that have entered into labor peace agreements. The bill defines
“affordable financing,” “labor peace agreement,” and “eligible recipient,” the latter
of which includes in part a local governmental unit; a nonprofit organization
involved in community development; a land trust; a cooperative; an entity created
by financial institutions that pools funds to lend for affordable housing development;
a developer of housing or preservation projects if all the entities financing a project
invite the Public Bank to participate; a state-chartered financial institution if the
financing extended is used to support another eligible recipient; a community
development authority, redevelopment authority, housing authority, or community
development corporation; a small business enterprise that meets certain criteria;
and a small- or medium-sized farm and its related industries.

2. The Public Bank, in partnership with independent community banks, credit
unions, community development authorities, redevelopment authorities, housing
authorities, or community development corporations, may do the following: 1)
leverage at least 30 percent of public deposits as financial capital and resources to
provide access to low-cost capital or credit to small businesses, minority-owned and
women-owned business enterprises, entrepreneurs, start-up businesses, farmers,
and communities and individuals of this state having below average income, to
further economic growth, create jobs, reduce greenhouse gases, and build and
sustain affordable housing; 2) leverage the Public Bank's financial capital and
resources to provide access to low-cost capital to bring fiscally sound and financially
successful businesses into this state; and 3) leverage the Public Bank's financial
capital and resources to provide access to low-cost capital or credit to established
businesses in this state for the purpose of providing financial stability for the Public
3. The Public Bank may join in making participation loans in which the Public
Bank shares in funding the loan with community banks, credit unions, community
development authorities, redevelopment authorities, housing authorities, and
community development corporations in this state, to qualified individuals and
businesses residing or doing business in this state if the originator of the loan is a
state-chartered financial institution.
4. The Public Bank may facilitate investment in, and financing of, construction
or improvement of new and existing public infrastructure systems, but the Public
Bank must first submit to the governor and legislature an implementation plan that
includes certain information.
5. The Public Bank, in partnership with independent community banks, credit
unions, or community development corporations, may administer a state guarantee
loan program to assist students in need of low-cost student loans and related loan
benefits, including the refinancing of existing student loan debt. Before doing so, the
Public Bank must develop an implementation plan for the program that includes
specified elements.
6. The Public Bank may serve as a clearinghouse for financial institutions that
make the Public Bank a reserve depository.
7. The Public Bank may serve as a banker's bank for this state's
state-chartered financial institutions by providing correspondent banking services
and other related services for these financial institutions in unbanked and
underserved communities. The Public Bank may not compete with this state's
state-chartered financial institutions, particularly in unbanked and underserved
8. The Public Bank may make loans and incur debt and other nondeposit
liabilities, including money market borrowing, federal reserve borrowing, and
capital market borrowing. The Public Bank may buy and sell federal funds; issue
letters of credit for public deposits; rediscount paper; and provide a safekeeping
service for securities, bonds, and other investments.

9. The Public Bank must provide to the state all reasonable and necessary
depository services and may charge its cost of services to the state. The Public Bank
may provide corporate trust services for the state.
The bill requires the Public Bank to develop and maintain a business plan that
sets forth the Public Bank's strategy for accomplishing its statutory directives
through safe and sound operation. The bill specifies a process for developing the
business plan that includes input from the public. The business plan must include
the method of providing security or insurance for the public deposits that the Public
Bank receives. The Public Bank must make the business plan available to the public,
and the business plan must be updated at least once every four years. In developing
the business plan and in conducting its operations, the Public Bank must give
priority to the following considerations:
1. Supporting eligible recipients subject to the historic and current economic
inequities experienced by communities in underserved neighborhoods, as well as
eligible recipients working to remedy those inequities.
2. Supporting eligible recipients subject to the historic and current economic
inequities experienced by women throughout the state.
3. Supporting rural business and farming concerns.
4. Supporting businesses with compensation structures that provide a livable
wage or demonstrate a commitment to equitable pay.
5. Supporting entities that address the impacts of climate change and the
reduction of greenhouse gases.
6. Funding the need of municipalities to update and build safe and sustainable
7. Supporting the operation of local governmental units, nonprofit
organizations, credit unions, local community banks, community development
authorities, redevelopment authorities, housing authorities, community
development corporations, and state-chartered financial institutions, including by
complementing or partnering rather than competing with these entities to
strengthen them and to expand affordable financing in the state.
8. Seeking participation loan options with the entities identified in 7., when
appropriate, rather than originating or servicing the loan itself.
9. Promoting equitable distribution of the Public Bank's resources across the
state, including ensuring that rural areas are given full and fair consideration.
The bill requires the Public Bank's CEO to implement the business plan and
manage the Public Bank consistently with the business plan. The Public Bank must
conduct its operations in compliance with the business plan, and the Public Bank's
governing board must monitor the Public Bank's compliance. The business plan may
only be overridden under certain emergency circumstances. As part of its
examination of the Public Bank as a state-chartered bank, the Division of Banking
must assess the Public Bank's compliance with the business plan, and this
assessment is available to the public six months after the examination.
Numerous provisions of current law treat state-created authorities similar to
state agencies for certain purposes. Although the Public Bank is not a state agency,
the bill treats the Public Bank similar to a state agency in the following respects,

among others: 1) it is generally subject to the open records and open meetings laws,
although certain information must be held confidential; 2) it is subject to auditing
by the Legislative Audit Bureau; 3) its CEO and members of the governing board are
subject to certain provisions of the state code of ethics; 4) its employees may
participate in the system for state retirement benefits and health insurance
coverage; and 5) it is exempt from sales and use taxes, property taxes, and income
taxes. Under the bill, the Public Bank is also subject to certain conflict-of-interest
restrictions, including that it may not transact business with its board members or
its officers or their immediate family members.
The bill requires the Public Bank to submit an annual report to the governor
and the legislature that includes specified information, including audited financial
statements, a description of the benefits of the Public Bank's activities to the state,
and certain compensation information.
The bill also creates an 18-member Board of Advisors, a state agency attached
to the Department of Financial Institutions, that reviews the Public Bank's
activities. The Board of Advisors must hold public meetings and maintain a website
that contains a comments portal that allows the public to comment on the activities
and future initiatives of the Public Bank. The Board of Advisors also communicates
to the Public Bank policy recommendations and concerns regarding the Public Bank.
The Public Bank must pay from its operating budget expenses incurred by the Board
of Advisors. The Public Bank must keep the Board of Advisors informed of the Public
Bank's operations, and the Public Bank and Board of Advisors must hold an annual
joint meeting.