LRB-0826/1
RNK/MES/EVM:jld&kjf:jf
2011 - 2012 LEGISLATURE
October 18, 2011 - Introduced by Senators Schultz, Olsen, Holperin and Taylor,
cosponsored by Representatives Brooks, Hulsey, Marklein, Pocan, Knilans,
Bewley, Krug, Mason, A. Ott, Turner, Jacque, Ripp, Clark, Tranel, Molepske
Jr
and C. Taylor. Referred to Committee on Agriculture, Forestry, and Higher
Education.
SB238,2,2 1An Act to repeal 24.61 (3) (c) and 24.61 (3) (d); to renumber and amend 24.66
2(1) (intro.), 24.66 (1) (a), 24.66 (1) (b) and 24.66 (1) (c); to amend 24.61 (2) (a)
33., 24.61 (2) (a) 4., 24.61 (2) (b), 24.61 (4) (title), 24.63 (1), (2), (2m) and (2r), 24.66
4(3m), 24.66 (5) (a), 24.67 (1) (d), 24.67 (2) (a), 24.67 (3), 24.68, 24.70 (3), 24.70
5(4), 24.70 (6), 24.71 (3), 24.71 (4), 24.71 (5), 24.715 (3), 24.715 (4), 24.716 (3),
624.716 (4), 24.717 (3), 24.717 (4) and 121.07 (1) (a); and to create 24.60 (1w),
724.60 (2m), 24.61 (2) (a) 11., 24.61 (4m), 24.63 (2s) and 24.66 (1) (cg) of the
8statutes; relating to: authorizing the Board of Commissioners of Public Lands
9to make revenue obligation trust fund loans to certain municipalities,
10authorizing the Board of Commissioners of Public Lands to make certain
11investments, application requirements for certain state trust fund loans,

1persons authorized to execute certificates of indebtedness, and collection
2procedures for outstanding state trust fund loans.
Analysis by the Legislative Reference Bureau
Under current law, the Board of Commissioners of Public Lands (BCPL) may
invest moneys in the common school fund, the normal school fund, the university
fund, and the agricultural college fund (trust funds) in certain specified investments.
Under current law, BCPL also administers a state trust fund loan program under
which it makes loans from moneys belonging to the trust funds to school districts,
local governments, and certain other public entities for certain public purposes.
This bill authorizes BCPL, in addition to its authority under current law to
make loans that are the general obligation of the borrower, to make loans that are
secured by the revenue generated by the activity for which the loan is made (revenue
obligation loans). Under the bill, BCPL may make a revenue obligation loan only if
it is made for the purpose of financing, or refinancing, a project that is secured by a
pledge and first priority assignment of the revenue that the municipality will receive
from moneys generated by the project or for the purpose of financing, or refinancing,
project costs that are secured by a pledge and first priority assignment of tax
increments that will be allocated to the municipality for those costs by the
Department of Revenue under the tax incremental financing program. The bill
provides that a revenue obligation loan may be made for any term not exceeding 30
years and may be made payable in installments. The bill further specifies that if a
revenue obligation loan is secured by a pledge and assignment of tax increments,
then the loan may not exceed an amount that would require the municipality to make
annual payments of more than 80 percent of the municipality's shared revenue
payments received in the previous year.
The bill also does the following:
1. Provides that, in addition to BCPL's authority under current law to invest
in bonds issued by this state, or by a town, village, city, county, or school district, it
may also invest in notes or other instruments of indebtedness issued by any of those
entities.
2. Authorizes BCPL to invest in bonds, notes, and other instruments of
indebtedness issued by a metropolitan sewerage district or a technical college
district.
3. Authorizes BCPL to invest in financial institution accounts that are insured
by a deposit insurance corporation.
4. Specifies that all bonds, notes, or other instruments of indebtedness and
securities purchased by BCPL must be deposited in a manner determined by the
board. Under current law, the deposit must be made with the secretary of
administration.
5. Provides that if BCPL makes a loan for the purpose of paying off existing
indebtedness, the making of the loan and the payment of the existing indebtedness
must be treated as if they occur simultaneously.

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:
SB238, s. 1 1Section 1. 24.60 (1w) of the statutes is created to read:
SB238,3,32 24.60 (1w) "General obligation trust fund loan" means a state trust fund loan
3that is the general obligation of the borrower.
SB238, s. 2 4Section 2. 24.60 (2m) of the statutes is created to read:
SB238,3,65 24.60 (2m) "Revenue obligation trust fund loan" means a state trust fund loan
6to which any of the following applies:
SB238,3,107 (a) It is made to a municipality for the purpose of financing or refinancing a
8project, as defined in s. 67.04 (1) (ar), and is secured by a pledge and assignment of
9the revenue that the municipality will receive from moneys generated by that
10project.
SB238,3,1411 (b) It is made to a city or village for the purpose of financing or refinancing
12project costs, as defined in s. 66.1105 (2) (f), and is secured by a pledge and
13assignment of the tax increments that will be allocated to the city or village for those
14project costs by the department of revenue under s. 66.1105 (6).
SB238,3,1815 (c) It is made to a county for the purpose of financing or refinancing project
16costs, as defined in s. 66.1105 (2) (f), and is secured by a pledge and assignment of
17the tax increments that will be allocated to the county for those project costs by the
18department of revenue under s. 59.57 (3).
SB238,4,219 (d) It is made to a town for the purpose of financing or refinancing project costs,
20as defined in s. 60.85 (1) (h) 1., and is secured by a pledge and assignment of the tax

1increments that will be allocated to the town for those project costs by the
2department of revenue under s. 60.85 (6).
SB238, s. 3 3Section 3. 24.61 (2) (a) 3. of the statutes is amended to read:
SB238,4,54 24.61 (2) (a) 3. Bonds of, notes, or other instruments of indebtedness issued by
5this state.
SB238, s. 4 6Section 4. 24.61 (2) (a) 4. of the statutes is amended to read:
SB238,4,97 24.61 (2) (a) 4. Bonds, notes, or other instruments of indebtedness issued
8pursuant to law by any town, village, city, county, metropolitan sewerage district,
9technical college district,
or school district of this state.
SB238, s. 5 10Section 5. 24.61 (2) (a) 11. of the statutes is created to read:
SB238,4,1211 24.61 (2) (a) 11. Financial institution accounts that are insured by a deposit
12insurance corporation, as defined in s. 214.01 (1) (h).
SB238, s. 6 13Section 6. 24.61 (2) (b) of the statutes is amended to read:
SB238,4,1714 24.61 (2) (b) Deposited with secretary of administration Manner for holding
15securities
. All bonds, notes, and other instruments of indebtedness and securities
16purchased under par. (a) shall be deposited with the secretary of administration held
17in a manner determined by the board
.
SB238, s. 7 18Section 7. 24.61 (3) (c) of the statutes is repealed.
SB238, s. 8 19Section 8. 24.61 (3) (d) of the statutes is repealed.
SB238, s. 9 20Section 9. 24.61 (4) (title) of the statutes is amended to read:
SB238,4,2121 24.61 (4) (title) Loan limitations to counties.
SB238, s. 10 22Section 10. 24.61 (4m) of the statutes is created to read:
SB238,5,223 24.61 (4m) Loans to pay off existing indebtedness. If the board makes a loan
24to a municipality to pay off existing indebtedness, the making of the loan and the

1payment of the existing indebtedness shall be treated as if they occur
2simultaneously.
SB238, s. 11 3Section 11. 24.63 (1), (2), (2m) and (2r) of the statutes are amended to read:
SB238,5,134 24.63 (1) Loans General obligation loans other than to school districts.
5A state general obligation trust fund loan, other than a loan to a school district, may
6be made for any term not exceeding 20 years and may be made payable in
7installments. A state general obligation trust fund loan to a municipality other than
8a school district shall be in an amount which does not, together with all other
9indebtedness of the municipality applying for the loan, exceed 5% of the valuation
10of the taxable property within the municipality as equalized for state purposes. If
11a state trust fund loan is made to pay off existing indebtedness, it may be advanced
12to the borrower in installments as fast as the indebtedness or the evidence of
13indebtedness is canceled.
SB238,5,18 14(2) School General obligation school district loans. A state general
15obligation
trust fund loan to a school district may be made for any time, not exceeding
1620 years, as is agreed upon between the school district and the board, and for an
17amount which, together with all other general obligation indebtedness of that
18district, does not exceed its allowable indebtedness as determined under s. 67.03 (1).
SB238,5,25 19(2m) Cooperative General obligation cooperative educational service
20agency loans.
A state general obligation trust fund loan to a cooperative educational
21service agency may be made for any term, not exceeding 20 years, as is agreed upon
22between the agency and the board, and for a total amount which, for each school
23district for which the loan is sought, in the proportion determined under s. 24.61 (7),
24together with all other general obligation indebtedness of the school district, does not
25exceed the school district's allowable indebtedness under s. 67.03 (1).
SB238,6,7
1(2r) Federated General obligation federated public library system loans.
2A state general obligation trust fund loan to a federated public library system may
3be made for any term, not exceeding 20 years, that is agreed upon between the
4federated public library system and the board and may be made for a total amount
5that, together with all other general obligation indebtedness of the federated public
6library system, does not exceed the federated public library system's allowable
7indebtedness under s. 43.17 (9) (b).
SB238, s. 12 8Section 12. 24.63 (2s) of the statutes is created to read:
SB238,6,119 24.63 (2s) Revenue obligation loans. (a) A revenue obligation trust fund loan
10to a city, village, town, or county may be made for any term not exceeding 30 years
11and may be made payable in installments.
SB238,6,1712 (b) 1. If the board makes a revenue obligation trust fund loan to a city, village,
13town, or county as described in s. 24.60 (2m) (b) to (d), the loan may not exceed an
14amount that would require the city, village, town, or county to make annual
15payments, including principal and interest, of more than 80 percent of the shared
16revenue payments received by the city, village, town, or county under subch. I of ch.
1779 in the year immediately preceding the year in which the loan application is made.
SB238,6,2118 2. The board may allow a city, village, town, or county that pledges and assigns
19tax increments as security for a revenue obligation trust fund loan to provide that
20the pledge and assignment is subject to future annual appropriations made by the
21governing body of the respective city, village, town, or county to repay the loan.
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