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 1An Act to repeal 231.01 (3c), 231.01 (3m) and 231.01 (5r); to amend 66.0621 (1)
2(b), 231.01 (4) (a), 231.01 (4) (b) 1., 231.01 (4) (b) 2., 231.01 (4) (b) 5., 231.01 (4)
3(c), 231.01 (7) (a) 1., 231.01 (7) (a) 2., 231.01 (7) (a) 4., 231.01 (7) (c), 231.02 (6)
4(b), 231.03 (5), 231.03 (6) (b), 231.03 (6) (g), 231.03 (7), 231.03 (8), 231.03 (11),
5231.03 (13), 231.03 (14), 231.03 (15), 231.03 (16), 231.03 (17), 231.03 (18),
6231.03 (19), 231.04, 231.05 (1), 231.06, 231.07 (1) (b), 231.07 (2) (a), 231.08 (3),
7231.08 (5), 231.10 (1), 231.12, 231.13 (1) (intro.), 231.13 (2), 231.16 (1), 231.16
8(3), 231.20 and 231.23; and to create 231.01 (5) (a) 7., 231.01 (5n), 231.01 (5p),
9231.01 (6m), 231.03 (6) (j) and 231.03 (6) (k) of the statutes; relating to:
10authorizing the Wisconsin Health and Educational Facilities Authority to issue
11bonds 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 1Section 1. 66.0621 (1) (b) of the statutes is amended to read:
AB508,3,32 66.0621 (1) (b) "Public utility" means any revenue producing facility or
3enterprise owned by a municipality and operated for a public purpose as defined in
4s. 67.04 (1) (b) including garbage incinerators, toll bridges, swimming pools, tennis
5courts, parks, playgrounds, golf links, bathing beaches, bathhouses, street lighting,
6city halls, village halls, town halls, courthouses, jails, schools, cooperative
7educational service agencies, hospitals, homes for the aged or indigent, child care
8centers, as defined in s. 231.01 (3c), regional projects, waste collection and disposal

1operations, sewerage systems, local professional baseball park facilities, local
2professional football stadium facilities, local cultural arts facilities, and any other
3necessary public works projects undertaken by a municipality.
AB508, s. 2 4Section 2. 231.01 (3c) of the statutes is repealed.
AB508, s. 3 5Section 3. 231.01 (3m) of the statutes is repealed.
AB508, s. 4 6Section 4. 231.01 (4) (a) of the statutes is amended to read:
AB508,3,147 231.01 (4) (a) "Cost" means the sum of all costs incurred by a participating
8health institution, participating educational institution, participating research
9institution, or participating child care provider nonprofit institution, as approved by
10the authority, as are reasonable and necessary to accomplish the project, exclusive
11of any private or federal, state, or local financial assistance received by the
12participating health institution, participating educational institution, participating
13research institution, or participating child care provider nonprofit institution for the
14payment of the project cost.
AB508, s. 5 15Section 5. 231.01 (4) (b) 1. of the statutes is amended to read:
AB508,3,2416 231.01 (4) (b) 1. The cost incurred by or on behalf of the participating health
17institution, participating educational institution, participating research institution,
18or participating child care provider nonprofit institution of all necessary
19developmental, planning, and feasibility studies, surveys, plans, and specifications,
20architectural, engineering, legal, or other special services, the cost of acquisition of
21land and any buildings and improvements on the land, site preparation, and
22development including demolition or removal of existing structures, construction,
23reconstruction, and equipment, including machinery, fixed equipment, and personal
24property.
AB508, s. 6 25Section 6. 231.01 (4) (b) 2. of the statutes is amended to read:
AB508,4,4
1231.01 (4) (b) 2. The reasonable cost of financing incurred by a participating
2health institution, participating educational institution, participating research
3institution, or participating child care provider nonprofit institution in the course of
4the development of the project to the occupancy date.
AB508, s. 7 5Section 7. 231.01 (4) (b) 5. of the statutes is amended to read:
AB508,4,86 231.01 (4) (b) 5. Working capital not exceeding 3% of the estimated total project
7cost or 3% of the actual total final cost, whichever is larger
the amounts permitted
8under 26 CFR 1.148-6 (d) (3)
.
AB508, s. 8 9Section 8. 231.01 (4) (c) of the statutes is amended to read:
AB508,4,1710 231.01 (4) (c) All rents and other net revenues from the operation of the real
11property, improvements, or personal property on the project site by a participating
12health institution, participating educational institution, participating research
13institution, or participating child care provider nonprofit institution on and after the
14date on which the contract between a participating health institution, participating
15educational institution, participating research institution, or participating child
16care provider
nonprofit institution and the authority was entered into, but prior to
17the occupancy date, shall reduce the sum of all costs in this subsection.
AB508, s. 9 18Section 9. 231.01 (5) (a) 7. of the statutes is created to read:
AB508,4,2219 231.01 (5) (a) 7. Any hospital, ambulatory surgical center, skilled nursing
20facility, community-based residential facility, assisted living facility, home health
21agency, hospice, rehabilitation facility, medical office or clinic, or other similar
22facility that is located outside of this state.
AB508, s. 10 23Section 10. 231.01 (5n) of the statutes is created to read:
AB508,5,3
1231.01 (5n) "Nonprofit entity" means an entity that is described in section 501
2(c) (3) of the Internal Revenue Code and that is exempt from federal income tax under
3section 501 (a) of the Internal Revenue Code.
AB508, s. 11 4Section 11. 231.01 (5p) of the statutes is created to read:
AB508,5,65 231.01 (5p) "Nonprofit facility" means a facility that is owned or operated by
6a nonprofit entity.
AB508, s. 12 7Section 12. 231.01 (5r) of the statutes, as affected by 2011 Wisconsin Act 32,
8is repealed.
AB508, s. 13 9Section 13. 231.01 (6m) of the statutes is created to read:
AB508,5,1410 231.01 (6m) "Participating nonprofit institution" means a nonprofit entity, or
11an affiliate of that entity, that undertakes the financing and construction or
12acquisition of a project or undertakes the refunding or refinancing of obligations or
13of a mortgage or of advances as provided in this chapter, and is not any of the
14following:
AB508,5,1715 1. An entity authorized by state law to provide or operate an educational facility
16or an affiliate of an entity authorized by state law to provide or operate an
17educational facility.
AB508,5,1918 2. An entity authorized by state law to provide or operate a health facility or
19an affiliate of an entity authorized by state law to provide or operate a health facility.
AB508,5,2220 3. An entity authorized by state law to provide or operate a research facility or
21an affiliate of an entity authorized by state law to provide or operate a research
22facility.
AB508, s. 14 23Section 14. 231.01 (7) (a) 1. of the statutes is amended to read:
AB508,6,224 231.01 (7) (a) 1. A specific health facility, educational facility, research facility,
25or child care center nonprofit facility work or improvement to be refinanced,

1acquired, constructed, enlarged, remodeled, renovated, improved, furnished, or
2equipped by the authority with funds provided in whole or in part under this chapter.
AB508, s. 15 3Section 15. 231.01 (7) (a) 2. of the statutes is amended to read:
AB508,6,94 231.01 (7) (a) 2. One or more structures suitable for use as a child care center,
5research facility, nonprofit facility, health facility, laboratory, laundry, nurses' or
6interns' residence or other multi-unit housing facility for staff, employees, patients
7or relatives of patients admitted for treatment or care in a health facility, physician's
8facility, administration building, research facility, maintenance, storage, or utility
9facility.
AB508, s. 16 10Section 16. 231.01 (7) (a) 4. of the statutes is amended to read:
AB508,6,1511 231.01 (7) (a) 4. Any structure useful for the operation of a health facility,
12educational facility, research facility, or child care center nonprofit facility, including
13facilities or supporting service structures essential or convenient for the orderly
14conduct of the health facility, educational facility, research facility, or child care
15center nonprofit facility.
AB508, s. 17 16Section 17. 231.01 (7) (c) of the statutes, as affected by 2011 Wisconsin Act 32,
17is amended to read:
AB508,6,2418 231.01 (7) (c) "Project" may include more than one project, and it may include
19any combination of projects undertaken jointly by any participating health
20institution, participating educational institution, participating research institution,
21or participating child care provider nonprofit institution with one or more other
22participating health institutions, participating educational institutions,
23participating research institutions, or participating child care providers nonprofit
24institutions
.
AB508, s. 18 25Section 18. 231.02 (6) (b) of the statutes is amended to read:
AB508,8,2
1231.02 (6) (b) Notwithstanding any other provision of law, it is not a conflict
2of interest or violation of this section or of any other law for a trustee, director, officer,
3or employee of a participating health institution, participating educational
4institution, participating research institution, or participating child care provider
5nonprofit institution or for a person having the required favorable reputation for
6skill, knowledge, and experience in state and municipal finance or for a person
7having the required favorable reputation for skill, knowledge, and experience in the
8field of health facility, educational facility, research facility, or child care center
9nonprofit facility
architecture to serve as a member of the authority; if in each case
10to which par. (a) is applicable, the trustee, director, officer, or employee of the
11participating health institution, participating educational institution, participating
12research institution, or participating child care provider nonprofit institution
13abstains from discussion, deliberation, action, and vote by the authority in specific
14respect to any undertaking pursuant to this chapter in which his or her participating
15health institution, participating educational institution, participating research
16institution, or participating child care provider nonprofit institution has an interest,
17or the person having the required favorable reputation for skill, knowledge, and
18experience in state and municipal finance abstains from discussion, deliberation,
19action, and vote by the authority in specific respect to any sale, purchase, or
20ownership of bonds of the authority in which any business of which such person is
21a participant, owner, officer, or employee has a past, current, or future interest, or
22such person having the required favorable reputation for skill, knowledge, and
23experience in the field of health facility, educational facility, research facility, or child
24care center
nonprofit facility architecture abstains from discussion, deliberation,
25action, and vote by the authority in specific respect to construction or acquisition of

1any project of the authority in which any business of which such person is a
2participant, owner, officer, or employee has a past, current, or future interest.
AB508, s. 19 3Section 19. 231.03 (5) of the statutes is amended to read:
AB508,8,204 231.03 (5) Determine the location and character of any project to be financed
5under this chapter, and construct, reconstruct, remodel, maintain, enlarge, alter, add
6to, repair, lease as lessee or lessor and regulate the same, enter into contracts for any
7such purpose, enter into contracts for the management and operation of a project or
8other health facilities, educational facilities, research facilities, or child care centers
9nonprofit facilities owned by the authority, and designate a participating health
10institution, participating educational institution, participating research institution,
11or participating child care provider nonprofit institution as its agent to determine the
12location and character of a project undertaken by the participating health
13institution, participating educational institution, participating research institution,
14or participating child care provider nonprofit institution under this chapter and as
15the agent of the authority, to construct, reconstruct, remodel, maintain, manage,
16enlarge, alter, add to, repair, operate, lease as lessee or lessor and regulate the same,
17and as the agent of the authority, to enter into contracts for any such purpose,
18including contracts for the management and operation of such project or other health
19facilities, educational facilities, research facilities, or child care centers nonprofit
20facilities
owned by the authority.
AB508, s. 20 21Section 20. 231.03 (6) (b) of the statutes, as affected by 2011 Wisconsin Act 32,
22is amended to read:
AB508,9,623 231.03 (6) (b) Refinance outstanding debt of any participating health
24institution if the department of health services certifies that refinancing will result
25in a reduction in the participating health institution's rates below the rates which

1would have otherwise prevailed, except that the authority may not refinance any
2office or clinic of a person licensed under ch. 446, 447, 448, 449 or 455, or the
3substantially equivalent laws or rules of another state, and except that this
4certification is not required for the refinancing for a participating health institution
5that operates a facility as defined under s. 49.45 (6m) (a) 3, or for a participating
6health institution that is located in another state
.
AB508, s. 21 7Section 21. 231.03 (6) (g) of the statutes is amended to read:
AB508,9,128 231.03 (6) (g) Finance a purchase, or make a loan, under sub. (20). Bonds
9issued under this paragraph shall be payable from, or secured by interests in, tobacco
10settlement revenues and such other property pledged under the bond resolution and,
11notwithstanding s. 231.08 (3), are not required to mature in 30 50 years or less from
12the date of issue.
AB508, s. 22 13Section 22. 231.03 (6) (j) of the statutes is created to read:
AB508,9,1514 231.03 (6) (j) Finance any project undertaken for a nonprofit facility by a
15participating nonprofit institution.
AB508, s. 23 16Section 23. 231.03 (6) (k) of the statutes is created to read:
AB508,9,1817 231.03 (6) (k) Refinance outstanding debt of any participating nonprofit
18institution.
AB508, s. 24 19Section 24. 231.03 (7) of the statutes is amended to read:
AB508,9,2420 231.03 (7) Fix and revise from time to time and charge and collect rates, rents,
21fees, and charges for the use of and for the services furnished or to be furnished by
22a project or other health facilities, educational facilities, research facilities, or child
23care centers
nonprofit facilities owned by the authority or any portion thereof,
24contract with any person in respect thereto and coordinate its policies and

1procedures, and cooperate with recognized health facility, educational facility,
2research facility, or child care center nonprofit facility rate setting mechanisms.
AB508, s. 25 3Section 25. 231.03 (8) of the statutes is amended to read:
AB508,10,184 231.03 (8) Adopt rules for the use of a project or other health facility,
5educational facility, research facility, or child care center nonprofit facility or any
6portion of the project or facility owned, financed, or refinanced in whole or in part by
7the authority, including any property used as security for a loan secured through,
8from, or with the assistance of the authority. The authority may designate a
9participating health institution, participating educational institution, participating
10research institution, or participating child care provider nonprofit institution as its
11agent to establish rules for the use of a project or other health facilities, educational
12facilities, research facilities, or child care centers nonprofit facilities undertaken for
13that participating health institution, participating educational institution,
14participating research institution, or participating child care provider nonprofit
15institution
. The rules shall ensure that a project, health facility, educational facility,
16research facility, child care center nonprofit facility, or property may not be used
17primarily for sectarian instruction or study or as a place for devotional activities or
18religious worship.
AB508, s. 26 19Section 26. 231.03 (11) of the statutes is amended to read:
AB508,11,720 231.03 (11) Establish or contract with others to carry out on its behalf a health
21facility, educational facility, research facility, nonprofit facility, or child care center
22project cost estimating service, and make this service available on all projects to
23provide expert cost estimates and guidance to the participating health institution,
24participating educational institution, participating research institution, or
25participating child care provider nonprofit institution and to the authority. To

1implement this service and, through it, to contribute to cost containment, the
2authority may require such reasonable reports and documents from health facility,
3educational facility, research facility, or child care center nonprofit facility projects
4as are required for this service and for the development of cost reports and
5guidelines. The authority shall appoint a technical committee on health facility,
6educational facility, research facility, or child care center nonprofit facility project
7costs and cost containment.
AB508, s. 27 8Section 27. 231.03 (13) of the statutes is amended to read:
AB508,11,229 231.03 (13) Make loans to any participating health institution, participating
10educational institution, participating research institution, or, before May 1, 2000,
11participating child care provider nonprofit institution for the cost of a project in
12accordance with an agreement between the authority and the participating health
13institution, participating educational institution, participating research institution,
14or participating child care provider nonprofit institution. The authority may secure
15the loan by a mortgage or other security arrangement on the health facility,
16educational facility, research facility, or child care center nonprofit facility granted
17by the participating health institution, participating educational institution,
18participating research institution, or participating child care provider nonprofit
19institution
to the authority. The loan may not exceed the total cost of the project as
20determined by the participating health institution, participating educational
21institution, participating research institution, or participating child care provider
22nonprofit institution and approved by the authority.
AB508, s. 28 23Section 28. 231.03 (14) of the statutes is amended to read:
AB508,12,824 231.03 (14) Make loans to a health facility, educational facility, research
25facility, or, before May 1, 2000, child care center nonprofit facility for which bonds

1may be issued under sub. (6) (b) or, (d) or under s. 231.03 (6) (f), 1999 stats., (i), or (k),
2to refinance the health facility's, educational facility's, research facility's, or child
3care center's
nonprofit facility's outstanding debt. The authority may secure the loan
4or bond by a mortgage or other security arrangement on the health facility,
5educational facility, research facility, or child care center nonprofit facility granted
6by the participating health institution, participating educational institution,
7participating research institution, or participating child care provider nonprofit
8institution
to the authority.
AB508, s. 29 9Section 29. 231.03 (15) of the statutes is amended to read:
AB508,12,1810 231.03 (15) Mortgage all or any portion of a project and other health facilities,
11educational facilities, research facilities, or child care centers nonprofit facilities and
12the site thereof, whether owned or thereafter acquired, for the benefit of the holders
13of bonds issued to finance the project, health facilities, educational facilities,
14research facilities, or child care centers nonprofit facilities or any portion thereof or
15issued to refund or refinance outstanding indebtedness of participating health
16institutions, participating educational institutions, participating research
17institutions, or child care providers participating nonprofit institutions as permitted
18by this chapter.
AB508, s. 30 19Section 30. 231.03 (16) of the statutes is amended to read:
AB508,13,1420 231.03 (16) Lease to a participating health institution, participating
21educational institution, participating research institution, or participating child
22care provider
nonprofit institution the project being financed or other health
23facilities, educational facilities, research facilities, or child care centers nonprofit
24facilities
conveyed to the authority in connection with such financing, upon such
25terms and conditions as the authority deems proper, and charge and collect rents

1therefor, and terminate any such lease upon the failure of the lessee to comply with
2any of the obligations thereof; and include in any such lease, if desired, provisions
3that the lessee thereof shall have options to renew the term of the lease for such
4periods and at such rent as the authority determines or to purchase all or any part
5of the health facilities, educational facilities, research facilities, or child care centers
6nonprofit facilities or that, upon payment of all of the indebtedness incurred by the
7authority for the financing of such project or health facilities, educational facilities,
8research facilities, or child care centers nonprofit facilities or for refunding
9outstanding indebtedness of a participating health institution, participating
10educational institution, participating research institution, or participating child
11care provider
nonprofit institution, the authority may convey all or any part of the
12project or such other health facilities, educational facilities, research facilities, or
13child care centers nonprofit facilities to the lessees thereof with or without
14consideration.
AB508, s. 31 15Section 31. 231.03 (17) of the statutes is amended to read:
AB508,13,1916 231.03 (17) Charge to and apportion among participating health institutions,
17participating educational institutions, participating research institutions, and
18participating child care providers nonprofit institutions its administrative costs and
19expenses incurred in the exercise of the powers and duties conferred by this chapter.
AB508, s. 32 20Section 32. 231.03 (18) of the statutes is amended to read:
AB508,14,221 231.03 (18) Make studies of needed health facilities, educational facilities,
22research facilities, and child care centers nonprofit facilities that could not sustain
23a loan were it made under this chapter and recommend remedial action to the
24legislature; and do the same with regard to any laws or rules that prevent health

1facilities, educational facilities, research facilities, and child care centers nonprofit
2facilities
from benefiting from this chapter.
AB508, s. 33 3Section 33. 231.03 (19) of the statutes is amended to read:
AB508,14,144 231.03 (19) Obtain, or aid in obtaining, from any department or agency of the
5United States or of this state or any private company, any insurance or guaranty
6concerning the payment or repayment of, interest or principal, or both, or any part
7thereof, on any loan, lease, or obligation or any instrument evidencing or securing
8the same, made or entered into under the provisions of this chapter; and
9notwithstanding any other provisions of this chapter, to enter into any agreement,
10contract, or other instrument with respect to that insurance or guaranty, to accept
11payment in the manner and form provided therein in the event of default by a
12participating health institution, participating educational institution, participating
13research institution, or participating child care provider nonprofit institution, and
14to assign the insurance or guaranty as security for the authority's bonds.
AB508, s. 34 15Section 34. 231.04 of the statutes is amended to read:
AB508,15,4 16231.04 Expenses. All expenses of the authority incurred in carrying out this
17chapter shall be payable solely from funds provided under the authority of this
18chapter, and no liability may be incurred by the authority beyond the extent to which
19moneys have been provided under this chapter except that, for the purposes of
20meeting the necessary expenses of initial organization and operation of the authority
21for the period commencing on June 19, 1974 and continuing until such date as the
22authority derives moneys from funds provided to it under the authority of this
23chapter, the authority may borrow such moneys as it requires to supplement the
24funds provided under s. 20.440. Such moneys borrowed by the authority shall
25subsequently be charged to and apportioned among participating health

1institutions, participating educational institutions, participating research
2institutions, and participating child care providers nonprofit institutions in an
3equitable manner, and repaid with appropriate interest over a reasonable period of
4time.
AB508, s. 35 5Section 35. 231.05 (1) of the statutes is amended to read:
AB508,15,126 231.05 (1) By means of this chapter, it is the intent of the legislature to provide
7assistance and alternative methods of financing to nonprofit health institutions to
8aid them in providing needed health services consistent with the state's health plan,
9to nonprofit educational institutions to aid them in providing needed educational
10services, to nonprofit research institutions to aid them in providing needed research
11facilities, and to nonprofit child care providers to aid them in providing needed child
12care
other needed services and facilities in this state.
AB508, s. 36 13Section 36. 231.06 of the statutes, as affected by 2011 Wisconsin Act 32, is
14amended to read:
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