25.17(13m)
(13m) No later than 45 days after the end of each calendar quarter, submit a report to the department of administration and the cochairpersons of the joint committee on finance detailing all costs and expenses charged to funds under
s. 25.18 (1) (a) or
(m) during that calendar quarter.
25.17(14)
(14) As of December 31 of each year, make and file with the department of employe trust funds a report of the value of the assets of the fixed retirement investment trust and of the variable retirement investment trust, determined as of that date at market value for the variable retirement investment trust and on the following basis for the fixed retirement investment trust:
25.17(14)(a)
(a) Bonds and other evidences of debt and loans secured by mortgages having a fixed term and rate shall be valued at market value, except that if the investment board determines that a market value cannot readily be determined such items shall be valued at the outstanding principal balance.
25.17(14)(b)
(b) Preferred stocks shall be valued at current market value, but if no current market exists shall be valued at par.
25.17(14)(c)
(c) Real property which is leased to others shall be valued at market value, except that if the investment board determines that market value cannot readily be assigned such real property shall be valued at cost.
25.17(14)(d)
(d) Any preferred stock, bond, or mortgage which is in arrears or in default shall be assigned a value by the investment board which will approximate what the board in its sole discretion feels the asset is worth.
25.17(14)(e)
(e) All other investments shall be valued at market.
25.17(14)(f)
(f) With respect to all securities under
pars. (a) to
(e), the amount of any gain or loss at time of sale or other disposition, premium on call or redemption, commitment or standby fee, profit or loss on residual value, scrap value, fire or casualty award, condemnation award, adjustment in book value, or other gains or losses shall be transferred to the transaction amortization account of the fixed retirement investment trust under
s. 40.04 (3).
25.17(14)(g)
(g) With respect to all securities under
pars. (a) to
(e), the amount of any income or any adjustment in income shall be transferred to the current income account of the fixed retirement investment trust under
s. 40.04 (3).
25.17(14g)
(14g) Annually, on or before January 1, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under
s. 13.172 (3), a report of the board's annual investment goals and long-term investment strategies. The report shall specify any change in the annual investment goals and long-term investment strategies from those in the previous year.
25.17(14m)
(14m) Annually, on or before March 31, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under
s. 13.172 (3), a report including all of the following:
25.17(14m)(a)
(a) An assessment of the board's progress in meeting its annual investment goals established in the report under
sub. (14g).
25.17(14m)(b)
(b) Information on the types of investments held by the board, including the market values of the investments and the degree of risk associated with the investments, the board's use of derivatives, as defined in
s. 25.183 (1) (a), any ventures by the board into new markets, any use of new investment instruments by the board and a comparison of the investment performance of the board to that achieved by a peer group of public and private entities that invest similar-sized funds.
25.17(14m)(c)
(c) A discussion of the amounts and categories of investments made within the state, including the amounts and categories of investments described, and progress in meeting the objectives of the plan submitted, under
sub. (70).
25.17(14r)
(14r) Upon adopting any change in the board's investment policies or guidelines, submit to the joint legislative audit committee, to the joint committee on finance and to the chief clerk of each house, for distribution to the appropriate standing committees under
s. 13.172 (3), a report summarizing the change in the investment policies or guidelines.
25.17(15)
(15) For purposes of the power and authority of the investment board to make investments, the "admitted assets" of the fixed retirement investment trust or the variable retirement investment trust shall be the total valuation of the assets of such trust as set forth in the last report made pursuant to
sub. (14).
25.17(17)
(17) No later than January 31 annually, submit a report to the joint committee on finance concerning the amount of credits generated by the investment board with brokerage firms during the preceding calendar year. The report shall contain a separate itemization of the amount of directed credits for services to be provided by the firm providing the credit and 3rd party credits for services to be provided by any firm. The report shall include information regarding utilization of 3rd-party credits by the board.
25.17(51)
(51) Annually, have the legislative audit bureau conduct a financial audit, including an assessment of the fair presentation of the financial statements and an evaluation of the internal control structure of the board. As part of the financial audit, the legislative audit bureau shall identify certain statutes and policies and guidelines adopted by the board and shall determine the extent of compliance by the board with the statutes, policies and guidelines. The board shall reimburse the legislative audit bureau for the cost of audits required to be performed under this subsection.
25.17(51m)
(51m) Biennially, have the legislative audit bureau conduct a performance evaluation audit that includes an audit of the board's policies and management practices. The board shall reimburse the legislative audit bureau for the cost of audits required to be performed under this subsection.
25.17(52)
(52) Maintain records from which it can determine the particular investments of the sinking funds of the bond security and redemption fund made under
sub. (3) (dr) and the fair market value of such investments, and report this information to the department of administration at its request.
25.17(59)
(59) Invest or deposit money from the appropriation under
s. 20.143 (1) (fm) in a public depository located in this state that is at least 51% owned by a minority group member or minority group members, as defined in
s. 560.036 (1) (f).
25.17(61)
(61) Designate special depositories in which the state treasurer may make special deposits of funds, not exceeding the amount limited by the board, which shall be deposited subject to the depository's rules and regulations relative to either savings accounts, time certificates of deposit or open time accounts, as the case may be.
25.17(65)
(65) Invest the industrial building construction loan fund under
sub. (1) (hm) only on the basis specified in
sub. (3) (b) or
(ba).
25.17(70)(a)(a) No later than June 30 of every odd-numbered year, after receiving a report from the department of commerce under
s. 560.08 (2) (m) and in consultation with the department of commerce, submit to the governor and to the presiding officer of each house of the legislature a plan for making investments in this state. The purpose of the plan is to encourage the board to make the maximum amount of investments in this state, subject to
s. 25.15 and consistent with the statutory purpose of each trust or fund managed by the board.
25.17(70)(b)
(b) The plan shall discuss potential investments to be made during the first to 5th fiscal years following submittal, and shall include, but not be limited to, the following:
25.17(70)(b)1.
1. A report from the department of commerce under
s. 560.08 (2) (m) describing the types of investments in businesses in this state which will have the greatest likelihood of enhancing economic development in this state.
25.17(70)(b)2.
2. Nonbinding management objectives for each fiscal year stated, as appropriate, as a dollar amount or as a percentage of the total amount of all investments made by the investment board, for the following:
25.17(70)(b)2.a.
a. The number and value of holdings of securities of entities headquartered or primarily located in this state.
25.17(70)(b)2.b.
b. The number and value of holdings of securities of entities with significant employment in this state.
25.17(70)(b)2.c.
c. The number and value of investments to be made annually in companies that are reasonably likely to use the moneys invested by the investment board to maintain or expand employment in this state. Such investments may include: 1) loans to corporations and other organizations to maintain or expand operations in this state; 2) purchases of new equity offerings by companies whose equities are not broadly traded on major exchanges, if the proceeds are to be used to maintain or expand operations in this state; 3) purchases of real estate located in this state; 4) purchases of certificates of deposit or similar instruments issued by financial institutions with substantial operations in this state; 5) investments in venture capital firms based in this state; 6) investments in venture capital firms based in other states, if those investments are to be used to purchase securities in companies located in this state; 7) investments in businesses headquartered in this state that have less than 500 employes; and 8) other investments that the investment board determines will result in maintenance or expansion of employment in this state.
25.17(70)(b)3.
3. Recommended actions to help the board meet its management objectives. The actions may include preparing and distributing informational materials, soliciting and reviewing proposals from venture capital investment firms located within or outside this state for investments in businesses in this state and soliciting investment proposals from businesses in this state.
25.17(70)(b)4.
4. Comments solicited from the secretary of commerce and received by the board on or before May 31 of the year of submittal.
25.17 History
History: 1971 c. 41 s.
12;
1971 c. 74;
1971 c. 100 s.
23;
1971 c. 125 s.
522 (1);
1971 c. 164;
1971 c. 214 s.
147;
1971 c. 260 s.
92 (3) to (5);
1973 c. 117,
137,
151;
1973 c. 208 s.
17;
1973 c. 209,
333,
336;
1975 c. 26,
27,
39,
118,
147,
164,
180,
189,
200,
422;
1977 c. 29 ss.
439 to
439f,
1654 (1);
1977 c. 31,
107,
377,
418,
423;
1979 c. 32;
1979 c. 34 ss.
705 to
707b,
2102 (56) (a);
1979 c. 102;
1979 c. 109 s.
16;
1979 c. 221;
1979 c. 318 ss.
1 to
3;
1979 c. 361 s.
113;
1981 c. 20,
86;
1981 c. 96 ss.
18 to
21,
67;
1981 c. 169,
386;
1983 a. 27;
1983 a. 36 ss.
31,
96 (4);
1983 a. 81 s.
11;
1983 a. 83 s.
20;
1983 a. 142,
189,
192,
368,
410;
1985 a. 25,
29,
53,
120;
1985 a. 332 s.
251 (1);
1987 a. 27,
38,
119,
186,
252,
399;
1989 a. 13,
31,
64,
187,
307,
335,
359,
366;
1991 a. 32,
38,
39,
152,
174,
221,
269,
315;
1993 a. 16,
112,
263,
477;
1995 a. 27 ss.
1394m to
1396,
9116 (5);
1995 a. 56,
213,
227,
274,
403;
1997 a. 27,
35,
191.
25.17 Annotation
The investment board is an independent going concern not protected by sovereign immunity. Bahr v. State v. Investment Bd. 186 W (2d) 379, 521 NW (2d) 152 (Ct. App. 1994).
25.17 Annotation
State deposits in a working bank must be payable on demand and withdrawn only by check issued on a warrant authorized by the department of administration. A proposal for the use of "check float" to purchase short-term securities is unauthorized. 58 Atty. Gen. 107.
25.17 Annotation
Commingling of common stocks of various employe trust funds is not prohibited by sub. (3) (f). 59 Atty. Gen. 149.
25.17 Annotation
Investment board may not, without authorization from the legislature, engage in "put" and "call" options on its stock portfolio. 60 Atty. Gen. 266.
25.17 Annotation
The investment board has authority under sub. (8) to contribute to a private improvement association for street improvements, if the improvements will directly benefit the board's property. 65 Atty. Gen. 85.
25.17 Annotation
The investment board lacks authority to borrow money and secure that debt utilizing real estate owned by it as an asset of fixed retirement trust. The board has authority to acquire encumbered real estate where the debt is assumed without recourse.
78 Atty. Gen. 189.
25.18
25.18
Additional powers of board. 25.18(1)
(1) In addition to the powers and duties enumerated in
s. 25.17, but subject to
s. 25.183, the investment board may:
25.18(1)(a)
(a) Notwithstanding
subch. IV of ch. 16 and
s. 20.930, employ special legal or investment counsel in any matters arising out of the scope of its investment authority. The employment of special legal counsel shall be with the advice and consent of the attorney general whenever such special counsel is to be compensated by the board. Any expense of counsel so employed shall be borne by the current income account of the fund for which the services shall be furnished, except that the fixed retirement investment fund may bear this expense from its transaction amortization account.
25.18(1)(b)
(b) Execute instruments in which it agrees to indemnify against its failure to indorse payments of any kind which may be made upon notes, bonds, debentures or other securities or to indemnify the issuer of securities, whether it be the obligor thereon or a trustee or agent, against any loss which might be incurred as the result of the issuance or reissuance of securities to replace securities which have been lost, stolen, mutilated or destroyed.
25.18(1)(c)
(c) Secure insurance against burglary, robbery, theft or any other risks relating to any of the securities, properties or other investments owned or held by the board or any of the funds or trusts under its management. The board shall pay the costs of such insurance from the current income of the funds or trusts benefiting from the insurance.
25.18(1)(d)
(d) Liquidate or cause to be liquidated any corporation 100% of whose common stock is owned by the board, or operate such corporation until it can be liquidated to recoup the investment of the board, but such period shall not exceed 5 years.
25.18(1)(e)
(e) Take such action as may be necessary to make investments in mortgage loans or in the purchase of interests in real estate in any other state or in Canada, including but not excluding because of enumeration, qualifying to do business, filing reports, paying franchise, license or other fees and taxes, designating agents, designating an office and subjecting itself to suit.
25.18(1)(f)
(f) Maintain and repair any building or other structure or premises which it owns in fee or in which it owns the beneficial interest and, notwithstanding
subch. IV or
V of ch. 16, it shall have exclusive authority to make such agreements and enter into such contracts as it deems necessary for such purpose. All noncapital costs under this paragraph shall be charged to the current income accounts of the funds having an interest in the building, structure or premises.
25.18(1)(g)
(g) Engage in financial transactions whereby bearer securities issued or guaranteed by the federal government or any of its agencies, which are owned by the board, are delivered to reputable and financially responsible dealers in the securities under an agreement which provides:
25.18(1)(g)1.
1. For the replacement of the securities with securities of the same kind and amount upon demand by the board;
25.18(1)(g)2.
2. For the payment to the board by the dealer of a commission, based upon the amount of the securities, for the period of time between the delivery of the securities to the dealer and the dealer's replacement of the securities; and
25.18(1)(g)3.
3. For the pledge and delivery by the dealer to the board of other securities issued or guaranteed by the federal government or any of its agencies, having a market value at the time of the pledge equal to at least the market value of the delivered securities, to guarantee the replacement of the securities.
25.18(1)(h)
(h) Sell stock, debentures or other securities which it has the right to acquire upon the exercise of conversion rights then owned by it.
25.18(1)(i)
(i) Engage in financial transactions whereby securities owned by the board, are delivered to reputable and financially responsible dealers under an agreement satisfactory to the board which provides for cash equal to the full current market value of the security as adjusted from time to time to changes in the market, and for replacement thereof with securities of the kind and amount upon demand by the board.
25.18(1)(j)
(j) Engage in financial transactions whereby securities owned by the board are delivered to reputable and financially responsible dealers under an agreement satisfactory to the board which provides for delivery to the board of other securities as collateral of at least equal value to the current market value of the security as adjusted from time to time to changes in the market, and for replacement of the original securities of the same kind and amount upon demand by the board.
25.18(1)(k)
(k) Engage in financial transactions whereby securities are purchased by the board under an agreement providing for the resale of such securities by the board to the original seller at a stated price together with a payment to the board of interest for the period the board holds the securities.
25.18(1)(m)
(m) Notwithstanding
subchs. IV and
V of ch. 16, employ professionals, contractors or other agents necessary to evaluate or operate any property if a fund managed by the board has an interest in, or is considering purchasing or lending money based upon the value of, that property. Costs under this paragraph shall be paid by the fund and charged to the appropriate current income account under
s. 40.04 (3).
25.18(1)(n)
(n) For the purpose of protecting an investment or group of assets aggregated for investment purposes against a risk, to meet nonspeculative objectives relating to rates of return or cash flow requirements or for similar purposes, enter into a contract with any person whom the board considers to be creditworthy to exchange the nature of payments or assets due to be given or received between the parties.
25.18(2)
(2) In addition to the powers set forth in
sub. (1) and
s. 25.17, but subject to
s. 25.183, the investment board may:
25.18(2)(a)
(a) Nominate employes, members, agents or other representatives of the board to serve as directors of corporations, companies, associations or any other legal entities and allow them to serve as such representing the board. Notwithstanding
ss. 19.56 and
25.16 (2), members, agents or other representatives of the board, except employes, may retain any compensation paid to them as directors. An employe of the board who receives compensation for serving as a director shall deposit the compensation with the board.
25.18(2)(b)
(b) Have its employes, agents or other representatives represent the board in meetings of shareholders, limited liability companies, partnerships or associations.
25.18(2)(c)
(c) Have any of its employes serve as an officer of a corporation in which it owns voting stock, or have any of its employes serve as an officer of a company, joint venture or association, or as a manager of a limited liability company, in which it owns an interest.
25.18(2)(d)
(d) Insure against from the current income of any fund or trust, or pay out of current income of any fund or trust, amounts arising from any acts of employes, members or agents of the board acting as officers or directors of a company in which the board has invested the moneys in the fund or trust.
25.18(2)(e)
(e) Contract with and delegate to investment advisers the management and control over assets from any fund or trust delivered to such investment advisers for investment in real estate, mortgages, equities, debt of foreign corporations and debt of foreign governments, and pay such advisers fees from the current income of the fund or trust being invested. No more than 15% of the total assets of the fixed retirement investment trust or 15% of the total assets of the variable retirement investment trust may be delivered to investment advisers. The board shall set performance standards for such investment advisers, monitor such investments to determine if performance standards are being met and if an investment adviser does not consistently meet the performance standards then terminate the contract with such investment adviser.
25.183
25.183
Certain investments prohibited. 25.183(1)(a)
(a) "Derivative" means any financial contract or other instrument that derives its value from the value or performance of any security, currency exchange rate or interest rate or of any index or group of any securities, currency exchange rates or interest rates, but does not include any of the following:
25.183(1)(a)1.
1. Any security that is traded on a national securities exchange or on an automated interdealer quotation system sponsored by a securities association registered under
15 USC 78o-3, et seq.
25.183(1)(a)2.
2. Any forward contract which has a maturity at the time of issuance not exceeding 270 days.
25.183(1)(a)3.
3. Any contract of sale of a commodity, as defined under
7 USC 2, for future delivery, or any option on such a contract, traded or executed on a designated contract market and subject to regulation under
7 USC 1 to
26.
25.183(1)(a)4.
4. Any security of an open-end management investment company or investment trust, if the investment company or investment trust is registered under
15 USC 80a-1 to
80a-64.
25.183(1)(a)6e.
6e. Any collateralized mortgage obligation or other asset-backed security which either has one of the 2 highest ratings given by a nationally recognized rating service or is backed or collateralized by insured instruments, guarantees or pledges of the federal government, this state or an agency of the federal government or this state.
25.183(1)(a)6m.
6m. Any transaction permitted under
s. 25.18 (1) (n), if all of the following conditions are met at the time the transaction is entered into:
25.183(1)(a)6m.a.
a. The counterparty to the transaction is rated in, or has outstanding long-term debt which is rated in, one of the 2 highest ratings given by a nationally recognized rating service.
25.183(1)(a)6m.b.
b. The transaction is used only for specified hedging or interest rate risk reduction purposes.
25.183(1)(a)6m.c.
c. All of the board's payment obligations under the transaction are fully backed by distinctly identified assets held in the state investment fund.
25.183(1)(a)7.
7. Any financial contract or instrument that the board determines, by rule, is not a derivative.
25.183(1)(b)
(b) "Reverse repurchase agreement" means an agreement for the sale of securities by the board under which the board will repurchase those securities on or before a specified date and for a specified amount.
25.183(2)
(2) Derivative investments. After May 7, 1996, the board may not purchase or acquire any derivative in the state investment fund except in accordance with rules promulgated by the board. Rules promulgated under this subsection may not permit the purchase or acquisition of derivatives in the state investment fund unless the purchase or acquisition is made for the purpose of reducing risk of price changes or of interest rate or currency exchange rate fluctuations with respect to investments held or to be held by the board.
25.183(3)
(3) Reverse repurchase agreements. After May 7, 1996, the board may not enter into any reverse repurchase agreement unless the repurchase of securities under the agreement is required to occur no later than the next business day.
25.183 History
History: 1995 a. 274.
25.185
25.185
Minority financial advisers and investment firms. 25.185(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).
25.185(2)
(2) The investment board shall attempt to ensure that 5% of the total funds expended for financial and investment analysis and for common stock and convertible bond brokerage commissions in each fiscal year is expended for the services of minority financial advisers or minority investment firms.
25.185(3)
(3) The investment board shall annually report to the department of administration the total amount of moneys expended under
sub. (2) for common stock and convertible bond brokerage commissions, the services of minority financial advisers and the services of minority investment firms during the preceding fiscal year.
25.185 History
History: 1987 a. 27;
1995 a. 27 s.
9116 (5).
