AB656: Bill Text

LRB-4552/1

KSH:skg:mkd

1995 - 1996 LEGISLATURE

1995 Assembly BILL 656

November 3, 1995 - Introduced by Representatives Plache, Coggs, Riley, Wirch, Notestein, Albers, Baldwin, Bock, R. Young, Black, Springer, F. Lasee, Gronemus, Plombon, Boyle, Kreuser, Baldus, Olsen and Gunderson, cosponsored by Senators Chvala, Decker, Jauch, Burke, Breske and Clausing. Referred to Committee on Ways and Means.

AB656,1,2 An Act to amend 20.866 (2) (yz); and to create 18.86 of the statutes; relating to: the issuance of higher education bonds and granting bonding authority.

Analysis by the Legislative Reference Bureau

Under current law, the building commission may issue state debt or revenue obligations as higher education bonds. The building commission may provide that higher education bonds may be presented for payment before maturity to any eligible educational institution for tuition, fees and other educationally related costs owed that eligible educational institution plus an allowance for other educationally related costs such as room and board, books and supplies. Current law requires that the building commission structure the terms of the bonds to encourage ownership by as many individuals as possible and that the obligations be issued in denominations of not more than $1,000. Higher education bonds are issued at a discount and current law authorizes the state to contract public debt in an amount not to exceed $100,000,000 to pay the difference between the amount of higher education bonds and any lesser amount, not including accrued interest, received upon the sale of the bonds.

This bill increases this public debt limitation from $100,000,000 to $200,000,000 and imposes additional marketing requirements on higher education bonds issued pursuant to this increased bonding authority. Under these requirements, the building commission is required to issue the bonds in $1,000 denominations with maturities of at least 5 years and no more than 20 years. During the first 4 days of the bond issue, no person may purchase more than a total of $5,000 of bonds; if any bonds remain unsold after this initial 4-day period, the building commission may permit a person to purchase up to $20,000 in bonds. The bill also requires that the building commission market the bonds in a manner designed to sell 25% of the bonds in areas designated by the building commission as rural areas.

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:

AB656, s. 1 Section 1. 18.86 of the statutes is created to read:

AB656,2,5 18.86 Marketing requirements. With respect to any issuance of bonds that are designated by the commission as higher education bonds under s. 18.82 and that are issued pursuant to bonding authority granted in 1995 Wisconsin Act .... (this act), the commission shall do all of the following:

AB656,2,7 (1) Issue the bonds in $1,000 denominations with maturities of at least 5 years and no more than 20 years.

AB656,2,10 (2) During the first 4 days of the bond issue, limit the purchase of bonds by any one person to a total of $5,000. If any bonds remain unsold after this initial 4-day period, the commission may permit a person to purchase a total of up to $20,000.

AB656,2,12 (3) Market the bonds in a manner that is designed to result in 25% of the bonds being sold in areas designated by the commission as rural areas.

AB656, s. 2 Section 2. 20.866 (2) (yz) of the statutes is amended to read:

AB656,2,18 20.866 (2) (yz) Building commission; discount sale of debt. From the capital improvement fund, a sum sufficient to pay the difference between the amount of public debt contracted under subch. IV of ch. 18 and any lesser amount, not including accrued interest, received upon the sale of that public debt. The state may contract public debt in an amount not to exceed $100,000,000 $200,000,000 for this purpose.

AB656,2,19 (End)