18.56(8)
(8) The rates for all services rendered by a revenue-producing enterprise or program to the state or to other consumers, shall be reasonable and just, taking into account and consideration the value of the services, the cost of maintaining and operating the same, the proper and necessary allowance for depreciation replacement and reserve, and a sufficient and adequate return upon the capital invested.
18.56(9)
(9) The commission may provide in the authorizing resolution for bonds or by subsequent action all things necessary to carry into effect this section. Any authorizing resolution shall constitute a contract with the holder of any bonds issued pursuant to such resolution. Any authorizing resolution may contain such provisions or covenants, without limiting the generality of the power to adopt the resolution, as is deemed necessary or desirable for the security of bondholders or the marketability of the bonds, including but not limited to provisions as to:
18.56(9)(a)
(a) The sufficiency of the rates or charges to be made for services.
18.56(9)(b)
(b) The maintenance and operation of the enterprise or program.
18.56(9)(c)
(c) Improvements or additions to and sale or alienation of the revenue-producing enterprise or program.
18.56(9)(e)
(e) Employment of consulting engineers and accountants.
18.56(9)(h)
(h) Establishment of reserve or other funds.
18.56(9)(j)
(j) Deposit of the proceeds of the sale of the bonds or revenues of the revenue-producing enterprise or program in trust, including the appointment of depositories or trustees.
18.56(10)
(10) The authorizing resolution may set apart bonds the par value of which are equal to the principal amount of any secured obligation or charge subject to which a revenue-producing enterprise or program is to be purchased or acquired, and shall set aside in a sinking fund from the income of the revenue-producing enterprise or program, a sum sufficient to comply with the requirements of the instrument creating the security, or if the instrument does not make any provision therefor, the resolution shall fix and determine the amount which shall be set aside into such fund from month to month for interest on the secured obligation or charge, and a fixed amount or proportion not exceeding a stated sum, which shall be not less than one percent of the principal, to be set aside into the fund to pay the principal of the secured obligation or charge. Any balance in the fund after satisfying the secured obligations or charge, shall be transferred to the redemption fund. Bonds set aside for the secured obligation or charge may, from time to time, be issued to an amount sufficient with the amount then in the sinking fund, to pay and retire the secured obligation or charge or any portion thereof. The bonds may be issued in exchange for or satisfaction of the secured obligation or charge, or may be sold in the manner provided in this subchapter, and the proceeds applied in payment of the same at maturity or before maturity by agreement with the holder. The commission and the owners of any revenue-producing enterprise or program acquired or purchased may, upon such terms and conditions as are satisfactory, contract that bonds to provide for the discharge of the secured obligation or charge, or for the whole purchase price shall be deposited with a trustee or depository and released from the deposit from time to time on such terms and conditions as are necessary to secure the payment of the secured obligation or charge.
18.56 Annotation
Federal provision subjecting interest on unregistered state and local bonds to federal income tax does not violate 10th Amendment or intergovernmental tax immunity doctrine. South Carolina v. Baker, 485 US 505 (1988).
18.57
18.57
Enterprise and program capital funds. 18.57(1)
(1) A separate and distinct fund shall be established in the state treasury or in an account maintained by a trustee under
s. 18.56 (9) (j) with respect to each revenue-producing enterprise or program the income from which is to be applied to the payment of any revenue obligation. All moneys resulting from the issuance of evidences of revenue obligation shall be credited to the appropriate fund or applied for refunding or note renewal purposes, except that moneys which represent premium or accrued interest received on the issuance of evidences shall be credited to the appropriate redemption fund.
18.57(2)
(2) Moneys in such funds may be expended, pursuant to appropriations, only for the purposes and in the amounts for which borrowed, for the payment of the principal of and interest on related revenue obligations and for expenses incurred in issuing such obligations.
18.57(3)
(3) Moneys in such funds may be commingled only for the purpose of investment with other public funds, but they shall be invested only in investment instruments permitted in
s. 25.17 (3) (dg) or in clean water fund investment instruments permitted in
s. 281.59 (2m). All such investments shall be the exclusive property of such fund and all earnings on or income from investments shall be credited to such fund and shall become available for any of the purposes under
sub. (2) and for the payment of interest on related revenue obligations.
18.57(4)
(4) If, after all outstanding related revenue obligations have been paid or payment provided for, moneys remain in any such fund, they shall be paid over to the treasury and the fund shall be closed.
18.58
18.58
Other fiscal and administrative regulations. 18.58(1)(1)
Management of funds and records. All funds established under this subchapter which are deposited in the state treasury shall be managed as provided by law for other state funds, subject to any contract rights vested in holders of evidences of revenue obligation secured by such fund. The department of administration shall maintain full and correct records of each fund. The legislative audit bureau shall audit each fund as of January 1 of each year reconciling all transactions and showing the fair market value of all property on hand. All records and audits shall be public documents. All funds established under this subchapter which are deposited with a trustee under
s. 18.56 (9) (j) shall be managed in accordance with resolutions authorizing the issuance of revenue obligations, agreements between the commission and the trustee and any contract rights vested in holders of evidence of revenue obligations secured by such fund.
18.58(2)
(2) Insurance. The commission may procure insurance on any issue of revenue obligations.
18.58(3)
(3) Extinguishment of debt. Interest shall cease to accrue on a revenue obligation on the date that the obligation becomes due for payment if payment is made or duly provided for, but the obligation and accrued interest shall continue to be a binding obligation according to its terms until 6 years overdue for payment, or such longer period as may be required by federal law. At that time, unless demand for its payment has been made, it shall be extinguished and shall be deemed no longer outstanding.
18.58(4)
(4) Substantive covenants. Notwithstanding any other provision of this subchapter, the state department or agency head carrying out program responsibilities for which a revenue obligation has been authorized by the legislature shall have the authority to formulate covenants respecting the operation of the related enterprise or program. The department or agency head shall consult with the commission with respect to the effect of any proposed covenants on the sale of the proposed revenue obligation. Nothing in this subsection shall be construed to expand the powers of any state department or agency.
18.58 History
History: 1977 c. 29;
1979 c. 34.
18.59
18.59
Bond anticipation notes. 18.59(1)
(1) Whenever the commission has adopted an authorizing resolution for revenue-obligation bonds for any one or more of the purposes described in
s. 18.53 (3), it may, prior to the issuance of the bonds and in anticipation of their sale, adopt an authorizing resolution for revenue-obligation bond anticipation notes. The authorizing resolution shall recite that all conditions precedent to the issuance of revenue-obligation bonds required by law or by the resolution authorizing the bonds have been complied with and that the notes are issued for the purposes for which the bonds were authorized or to renew notes issued for such purposes. The authorizing resolution shall pledge to the payment of the principal of the notes the proceeds of the sale of the bonds. Upon the adoption of the authorizing resolution, the authorizing resolution for the bonds shall be irrevocable until the notes have been paid.
18.59(2)
(2) All original revenue-obligation bond anticipation notes, or any renewal, shall mature within 5 years from the date of issue of the original notes. The notes shall be named revenue-bond anticipation notes and shall recite on their face that they are payable solely from the proceeds of revenue-obligation bonds to be issued under this subchapter. The aggregate amount of such notes outstanding including interest to accrue shall not exceed the aggregate principal amount of the bonds in anticipation of the sale of which they are issued. The rate of interest borne by the notes shall not exceed any maximum rate of interest authorized to be borne by the bonds. No lien shall be created or attached with respect to any property of the state as a consequence of the issuance of such notes except as provided in
sub. (4).
18.59(3)
(3) No original revenue-obligation bond anticipation notes shall be issued until the state department or agency head carrying out program responsibilities for which the revenue obligation bonds have been authorized has certified to the commission that contracts are to be let and that the proceeds of the notes will be required for the payment of the contracts.
18.59(4)
(4) Upon the issuance of revenue-obligation bond anticipation notes, there shall be paid into the funds or accounts respectively provided for the payment of the principal and interest of the revenue-obligation bonds in anticipation of the sale of which the notes are issued, from the portion of the income of the enterprise or program allocated to the payment of principal and interest, the same amount at the same times as would have been required to be paid for the payment of the principal and interest of the bonds if the bonds, in an equal principal amount and at the same rate of interest, maturing in annual instalments over 50 years, had been issued instead of the notes. Such moneys or any part thereof may, by the authorizing resolution for the notes, be pledged for the payment of the principal and interest of the notes.
18.59(5)
(5) All funds derived from the sale of revenue-obligation bonds or renewal notes issued subsequent to the issuance of revenue-obligation bond anticipation notes which the notes were issued in anticipation of the sale shall constitute a trust fund, and the fund shall be expended first for the payment of principal and interest of the notes, and then may be expended for other purposes set forth in the authorizing resolution for the bonds or renewal notes.
18.59(6)
(6) The commission may authorize the issuance of renewal revenue-obligation bond anticipation notes to provide funds for the payment of the principal and interest of any such notes then outstanding. All of the provisions of this section shall apply to the renewal notes.
18.59 History
History: 1977 c. 29.
18.60
18.60
Refunding bonds. 18.60(1)(1) The commission may authorize, for any one or more of the purposes described in
s. 18.53 (1), the issuance of revenue-obligation refunding bonds. Refunding bonds may be issued, subject to any contract rights vested in holders of bonds or notes being refinanced, to refinance more than one issue of bonds or notes notwithstanding that the bonds or notes may have been issued at different times for different purposes and may be secured by the property or income of more than one enterprise or program or may be public debt or building-corporation indebtedness. The principal amount of refunding bonds shall not exceed the sum of: the principal amount of the bonds or notes being refinanced; applicable redemption premiums; unpaid interest on the bonds or notes to the date of delivery or exchange of the refunding bonds; in the event the proceeds are to be deposited in trust as provided in
sub. (3), interest to accrue on the bonds or notes from the date of delivery to the date of maturity or to the redemption date selected by the commission, whichever is earlier; and the expenses incurred in the issuance of the refunding bonds and the payment of the bonds or notes. A determination by the commission that a refinancing is advantageous or that any of the amounts provided in the preceding sentence should be included in the refinancing shall be conclusive.
18.60(2)
(2) If the commission determines to exchange refunding bonds, they may be exchanged privately for and in payment and discharge of any of the outstanding bonds or notes being refinanced. Refunding bonds may be exchanged for a like or greater principal amount of the bonds or notes being exchanged therefor except that the principal amount of the refunding bonds may exceed the principal amount of the bonds or notes being exchanged therefor only to the extent determined by the commission to be necessary or advisable to pay redemption premiums and unpaid interest to the date of exchange not otherwise provided for. The holders of the bonds or notes being refunded who elect to exchange need not pay accrued interest on the refunding bonds if and to the extent that interest is accrued and unpaid on the bonds or notes being refunded and to be surrendered. If any of the bonds or notes to be refinanced are to be called for redemption, the commission shall determine which redemption dates shall be used, if more than one date is applicable and shall, prior to the issuance of the refunding bonds, provide for notice of redemption to be given in the manner and at the times required by the proceedings authorizing the outstanding bonds or notes.
18.60(3)
(3) The principal proceeds from the sale of any refunding bonds shall be applied either to the immediate payment and retirement of the bonds or notes being refinanced or, if the bonds or notes have not matured and are not presently redeemable, to the creation of a trust for and shall be pledged to the payment of the bonds or notes being refinanced. If a trust is created, a separate deposit shall be made for each issue of bonds or notes being refinanced. Each deposit shall be with the state treasurer or a bank or trust company that is then a member of the federal deposit insurance corporation. If the total amount of any deposit, including money other than sale proceeds but legally available for such purpose, is less than the principal amount of the bonds or notes being refinanced and for the payment of which the deposit has been created and pledged, together with applicable redemption premiums and interest accrued and to accrue to maturity or to the date of redemption, then the application of the sale proceeds shall be legally sufficient only if the money deposited is invested in securities issued by the United States or one of its agencies, or securities fully guaranteed by the United States, and only if the principal amount of the securities at maturity and the income therefrom to maturity will be sufficient and available, without the need for any further investment or reinvestment, to pay at maturity or upon redemption the principal amount of the bonds or notes being refinanced together with applicable redemption premiums and interest accrued and to accrue to maturity or to the date of redemption. The income from the principal proceeds of the securities shall be applied solely to the payment of the principal of and interest and redemption premiums on the bonds or notes being refinanced, but provision may be made for the pledging and disposition of any surplus. Nothing in this subsection shall be construed as a limitation on the duration of any deposit in trust for the retirement of bonds or notes being refinanced, but which have not matured and which are not presently redeemable. Nothing in this subsection shall be construed to prohibit reinvestment of the income of a trust if the reinvestments will mature at such times that sufficient cash will be available to pay interest, applicable premiums and principal on the bonds or notes being refinanced.
18.60(4)
(4) The commission may in addition to the other powers conferred by this subchapter, include a provision in any authorizing resolution for refunding bonds pledging all or any part of the income of any enterprise or program originally financed from the proceeds of any of the bonds or notes being refinanced, or pledging all or any part of the surplus income derived from the investment of any trust created under
sub. (3), or both.
18.60(5)
(5) All provisions of
s. 18.56 not inconsistent with the express provisions of this section shall apply to refunding bonds except that the maximum permissible term shall be 50 years from the date of original issue of the oldest note or bond issue being refunded.
18.60 History
History: 1977 c. 29.
18.61
18.61
Undertakings of state. 18.61(1)
(1) The state shall not be generally liable on revenue obligations and revenue obligations shall not be a debt of the state for any purpose whatsoever. All evidences of revenue obligation shall contain on their face a statement to that effect.
18.61(2)
(2) The state pledges and agrees with the holders of any evidences of revenue obligation that the state will not limit or alter its powers to fulfill the terms of any agreements made with the holders or in any way impair the rights and remedies of the holders until the revenue obligations, together with interest including interest on any unpaid instalments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of the holders, are fully met and discharged. The commission may include this pledge and agreement of the state in any agreement with the holders of notes or bonds and in any evidence of revenue obligation.
18.61(3)(a)(a) If the state fails to pay any revenue obligation in accordance with its terms, and default continues for a period of 30 days or if the state fails or refuses to comply with this subchapter or defaults in any agreement made with the holders of any issue of revenue obligations, the holders of 25% in aggregate principal amount of the revenue obligations of the issue then outstanding by instrument recorded in the office of the register of deeds of Dane county and approved or acknowledged in the same manner as a deed to be recorded may appoint a trustee to represent the holders of the notes or bonds for the purposes specifically provided in the instrument.
18.61(3)(b)
(b) The trustee may, and upon written request of the holders of 25% in aggregate principal amount of the revenue obligations of the issue then outstanding shall, in the trustee's own name:
18.61(3)(b)1.
1. By action or proceeding, enforce all rights of all holders of the issue of revenue obligations, including the right to require the state to collect enterprise or program income adequate to carry out any agreement as to, or pledge of, such income and to require the state to carry out any other agreements with the holders of the revenue obligations and to perform its duties under this subchapter;
18.61(3)(b)3.
3. By action, require the state to account as if it were the trustee of an express trust for the holders of the revenue obligations;
18.61(3)(b)4.
4. By action, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the revenue obligations; and
18.61(3)(b)5.
5. Declare all the revenue obligations due and payable, and if all defaults shall be made good, the aggregate principal amount of the revenue obligations of the issue then outstanding, to annul the declaration and its consequences.
18.61(3)(c)
(c) The trustee shall have all of the powers necessary or appropriate for the exercise of any functions specifically set forth in this subchapter or incident to the general representation of the holders of revenue obligations in the enforcement and protection of their rights.
18.61(3)(d)
(d) Before declaring the principal of revenue obligations due and payable, the trustee shall first give 30 days' notice in writing to the governor and the attorney general.
18.61(3)(e)
(e) Any action or proceeding by the trustee against the state may be commenced by delivering a copy of the summons and of the complaint to the attorney general or leaving them at the attorney general's office with an assistant or clerk. The place of trial of such an action shall be as provided in
s. 801.50.
Sections 16.53 and
775.01 shall not apply to such claims. If there is final judgment against the state in such action, it shall be paid as provided in
s. 775.04, together with interest at the rate of 10% per year from the date payment was judged to have been due until the date of payment of the judgment.
18.61(4)
(4) Any public officer or public employe, as defined in
s. 939.22 (30), and the surety on the person's official bond, or any other person participating in any direct or indirect impairment of any fund established under this subchapter, shall be liable in any action brought by the attorney general in the name of the state, or by any taxpayer of the state, or by the holder of any evidence of revenue obligation payable in whole or in part, directly or indirectly, out of such fund, to restore to the fund all diversions from the fund.
18.61(5)
(5) The legislature may provide, with respect to any specific issue of revenue obligations, prior to their issuance, that if the enterprise or program income pledged to the payment of the principal and interest of the issue is insufficient for that purpose, it will consider supplying the deficiency by appropriation of funds, from time to time, out of the treasury. If the legislature so provides, the commission may make the necessary provisions therefor in the authorizing resolution and other proceedings of the issue. Thereafter, if the contingency occurs, recognizing its moral obligation to do so, the legislature hereby expresses its expectation and aspiration that it shall make such appropriation.
18.62
18.62
Revenue obligations as legal investments. Any other provision of law to the contrary notwithstanding, the state, the investment board, all public officers, municipal corporations, political subdivisions and public bodies, all banks and bankers, savings and loan associations, credit unions, trust companies, savings banks and institutions, investment companies, insurance companies, insurance associations and other persons carrying on a banking or insurance business, and all executors, administrators, guardians, trustees and other fiduciaries, may legally invest any sinking funds, moneys or other funds belonging to them or within their control in any revenue obligations issued under this subchapter. Such revenue obligations shall be authorized security for all public deposits.
18.62 History
History: 1977 c. 29.
18.63
18.63
Validation of revenue obligations. 18.63(1)
(1) Notwithstanding any defects, irregularities, lack of power or failure to comply with any statute or any act of the commission, all revenue obligations issued or attempted to be issued after July 1, 1977 are declared to be valid; all instruments given after July 1, 1977 to evidence the obligation are declared to be binding, legal, valid, enforceable and incontestable in accordance with their terms; and all proceedings taken and certifications and determinations made after July 1, 1977 to authorize, issue, sell, execute, deliver or enter into the obligation or instruments are validated, ratified, approved and confirmed.
18.63(2)
(2) A determination, legislative, judicial or administrative, for any reason, that the state may not spend the proceeds of revenue obligations or that it has spent the proceeds for a purpose other than the stated purpose for which the revenue obligations were issued or for a purpose for which the state may not spend money, shall not affect the validity of the revenue obligations nor the evidence of revenue obligation therefor.
18.63 History
History: 1977 c. 29.
18.64
18.64
Minority financial advisers and investment firms. 18.64(1)(1) In this section, "minority financial adviser" and "minority investment firm" mean a financial adviser and investment firm, respectively, certified by the department of commerce under
s. 560.036 (2).
18.64(2)
(2) Except as provided under
sub. (7), in issuing evidences of revenue obligations by competitive sale, the commission shall ensure that at least 6% of the total of revenue obligations contracted in each fiscal year is underwritten by minority investment firms.
18.64(3)
(3) Except as provided under
sub. (7), in issuing evidences of revenue obligations by negotiated sale, the commission shall ensure that at least 6% of the total of revenue obligations contracted in each fiscal year is underwritten by minority investment firms.
18.64(4)
(4) Except as provided under
sub. (7), in issuing evidences of revenue obligations by competitive sale or negotiated sale, the commission shall ensure that at least 6% of the total moneys expended in such fiscal year for the services of financial advisers are expended for the services of minority financial advisers.
18.64(5)
(5) Except as provided under
sub. (7), an individual underwriter or syndicate of underwriters shall ensure that each bid or proposal, submitted by that individual or syndicate in a competitive or negotiated sale of a revenue obligation, provides for a portion of sales to minority investment firms.
18.64(6)
(6) The commission shall annually report to the department of administration the total amount of revenue obligations contracted with the underwriting services of minority investment firms and the total amount of moneys expended for the services of minority financial advisers during the preceding fiscal year.
18.64(7)
(7) The requirements of any of
subs. (2) to
(5) do not apply to an issuance of evidence of a revenue obligation, if the secretary of administration submits a report in writing specifying the building commission's reasons for not complying with the requirements of any of
subs. (2) to
(5) for that issuance.
OPERATING NOTES
18.70
18.70
Provisions applicable. The following sections apply to this subchapter, except that all references to "public debt", "debt" or "revenue obligation" are deemed to refer to "operating notes", all references to "evidence of indebtedness" are deemed to refer to "evidence of operating note", and all references to "evidences of indebtedness" are deemed to refer to "evidences of operating notes":
ss. 18.03,
18.06 (8),
18.07,
18.10 (1),
(2),
(4) to
(9) and
(11),
18.17,
18.52 (1),
18.58 (2),
18.61 (1),
18.62 and
18.63.
18.70 History
History: 1983 a. 3;
1991 a. 39.
18.71
18.71
Definitions. In this subchapter, unless the context requires otherwise:
18.71(1)
(1) "Commission" means the building commission.
18.71(2)
(2) "Department" means the department of administration.
18.71(3)
(3) "Evidence of operating note" means a written promise to pay an operating note.
18.71(4)
(4) "Operating note" means every undertaking of the state to repay a certain amount of a financial obligation which is:
18.71(4)(a)
(a) Created for the purpose of funding operating deficits of the state as determined under
s. 16.405 (1), which must be repaid not later than the last day of the fiscal year during which the operating note is issued;
18.71(4)(b)
(b) Payable from and secured solely by revenues pledged by the commission and the department pursuant to the authorizing resolution provided that all such pledged revenues must first be available for the payment of public debt; and
18.71 Annotation
See note to Art. VIII, sec. 4, citing State ex rel. La Follette v. Stitt, 114 W (2d) 358, 338 NW (2d) 684 (1983).
