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)
(70) 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. 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)(a)
(a) 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)
(b) 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 board, for the following:
25.17(70)(b)1.
1. The number and value of holdings of securities of entities headquartered or primarily located in this state.
25.17(70)(b)2.
2. The number and value of holdings of securities of entities with significant employment in this state.
25.17(70)(b)3.
3. The number and value of investments to be made annually in companies that are reasonably likely to use the moneys invested by the board to maintain or expand employment in this state. Such investments may include any of the following:
25.17(70)(b)3.a.
a. Loans to corporations and other organizations to maintain or expand operations in this state.
25.17(70)(b)3.b.
b. 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.
25.17(70)(b)3.d.
d. Purchases of certificates of deposit or similar instruments issued by financial institutions with substantial operations in this state.
25.17(70)(b)3.f.
f. 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.
25.17(70)(b)3.g.
g. Investments in businesses headquartered in this state that have less than 500 employees.
25.17(70)(b)3.h.
h. Other investments that the board determines will result in maintenance or expansion of employment in this state.
25.17(70)(c)
(c) 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)(d)
(d) 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;
1999 a. 9,
11,
63,
65,
83,
167,
196.
25.17 Annotation
The investment board is an independent going concern not protected by sovereign immunity. Bahr v. State v. Investment Bd.
186 Wis. 2d 379,
521 N.W.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
The commingling of common stocks of various employee trust funds is not prohibited by sub. (3) (f). 59 Atty. Gen. 149.
25.17 Annotation
The 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 the fixed retirement trust. The board has authority to acquire encumbered real estate if 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 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 fund for which the services shall be furnished.
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 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 board may:
25.18(2)(a)
(a) Nominate employees, 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 employees, may retain any compensation paid to them as directors. An employee 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 employees, 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 employees serve as an officer of a corporation in which it owns voting stock, or have any of its employees 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 employees, 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 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 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.
25.186
25.186
Broker-dealers located in this state. 25.186(1)(b)
(b) "Securities trading brokerage commission" means any commission or fee paid on or for a brokered security transaction, a purchase of a security or any other kind of trade of a security.
25.186(2)(a)(a) Of the total funds that are expended by the board for securities trading brokerage commissions in any fiscal year, the board shall pay at least 5% of the total funds in securities trading brokerage commissions to broker-dealers that are licensed under
s. 551.31, that are headquartered in this state and whose principal business operations are located in this state.
25.186(2)(b)
(b) For the purpose of satisfying the requirement under
par. (a), the board may not include any securities trading brokerage commissions paid to minority financial advisers and minority investment firms under
s. 25.185.
25.186(3)
(3) Annually, no later than September 30, the board shall submit a report to the department of administration documenting the amount of moneys expended in the preceding fiscal year by the board for securities trading brokerage commissions and the amount of moneys paid in the preceding fiscal year for securities trading brokerage commissions to broker-dealers under
sub. (2) (a).
25.186 History
History: 1999 a. 9.
25.187
25.187
Operating expenditures. 25.187(1)
(1) In this section, "operating expenditures" include all costs and expenses incurred by the investment board for the purpose of operating the board and managing the assets of each fund for which the board has management responsibility, but does not include costs or expenses incurred under
s. 25.18 (1) (a),
(c),
(f) or
(m) or
(2) (d) or
(e) or
40.04 (3) (intro.).
25.187(2)(a)(a) Subject to
pars. (b) and
(c), on July 1 and January 1 of each year, the investment board shall estimate the amounts required for its operating expenditures for the next 6-month period and shall assess each fund for which the board has management responsibility for its share of the estimated operating expenditures in an equitable manner. The board shall pay the assessment from the current income of each fund, unless an appropriation is made for payment of the assessment, in which case the assessment shall be paid from that appropriation account.
25.187(2)(b)
(b) If the estimate of the amounts required for the board's operating expenditures for a 6-month period differs from its actual operating expenditures, the board shall adjust the estimate of the amounts required for its operating expenditures for the next 6-month period to reflect the difference between its estimated operating expenditures and actual operating expenditures for the prior 6-month period.
