16.63(3)
(3) The secretary may organize one or more nonstock corporations under
ch. 181 or limited liability companies under
ch. 183 for any purpose related to the sale of the state's right to receive any of the payments under the tobacco settlement agreement and may take any action necessary to facilitate and complete the sale.
16.63(3m)(a)(a) If the secretary sells the state's right to receive any of the payments under the tobacco settlement agreement, the secretary shall require, as a condition of the sale, that the purchaser notify the secretary if any bonds or other obligations are issued that are secured by any of the payments and provide the secretary with all information on the distribution of the bond or obligation proceeds.
16.63(3m)(b)
(b) The secretary shall submit a report to the joint committee on finance that includes all of the information provided to the secretary by the purchaser under
par. (a).
16.63(4)(a)(a) Tobacco settlement revenues may not be considered proceeds of any property that is not tobacco settlement revenues.
16.63(4)(b)
(b) Except as otherwise provided in this subsection, the creation, perfection, and enforcement of security interests in tobacco settlement revenues are governed by
ch. 409. Notwithstanding
ch. 409, with regard to creating, perfecting, and enforcing a valid security interest in tobacco settlement revenues:
16.63(4)(b)1.
1. If this state or the Wisconsin Health and Educational Facilities Authority is the debtor in the transaction, the proper place to file the required financing statement to perfect the security interest is the department of financial institutions.
16.63(4)(b)2.
2. The required financing statement shall include a description of collateral that describes the collateral as general intangibles consisting of the right to receive settlement payments arising from or pursuant to the tobacco settlement agreement and all proceeds of that right. The required financing statement may include any additional description of collateral that is legally sufficient under the laws of this state.
16.63(4)(b)3.
3. The tobacco settlement revenues are general intangibles for purposes of
ch. 409.
16.63(4)(b)4.
4. A security interest perfected under this paragraph is enforceable against the debtor, any assignee or grantee, and all 3rd parties, including creditors under any lien obtained by judicial proceedings, subject only to the rights of any 3rd parties holding security interests in the tobacco settlement revenues previously perfected under this paragraph. Unless the applicable security agreement provides otherwise, a perfected security interest in the tobacco settlement revenues is a continuously perfected security interest in all tobacco settlement revenues existing on the date of the agreement or arising after the date of the agreement. A security interest perfected under this paragraph has priority over any other lien created by operation of law or otherwise, which subsequently attaches to the tobacco settlement revenues.
16.63(4)(b)5.
5. The priority of a security interest created under this paragraph is not affected by the commingling of proceeds arising from the tobacco settlement revenues with other amounts.
16.63(4)(c)
(c) The sale, assignment, and transfer of tobacco settlement revenues are governed by this paragraph. All of the following apply to a sale, assignment, or transfer under this paragraph:
16.63(4)(c)1.
1. The sale, assignment, or transfer is an absolute transfer of, and not a pledge of or secured transaction relating to, the seller's right, title, and interest in, to, and under the tobacco settlement revenues, if the documents governing the transaction expressly state that the transaction is a sale or other absolute transfer. After such a transaction, the tobacco settlement revenues are not subject to any claims of the seller or the seller's creditors, other than creditors holding a prior security interest in the tobacco settlement revenues perfected under
par. (b).
16.63(4)(c)2.
2. The characterization of the sale, assignment, or transfer as an absolute transfer under
subd. 1. and the corresponding characterization of the purchaser's property interest is not affected by any of the following factors:
16.63(4)(c)2.a.
a. Commingling of amounts arising with respect to the tobacco settlement revenues with other amounts.
16.63(4)(c)2.b.
b. The retention by the seller of a partial or residual interest, including an equity interest, in the tobacco settlement revenues, whether direct or indirect, or whether subordinate or otherwise.
16.63(4)(c)2.c.
c. The sale, assignment, or transfer of only a portion of the tobacco settlement revenues or an undivided interest in the tobacco settlement revenues.
16.63(4)(c)2.d.
d. Any recourse that the purchaser or its assignees may have against the seller.
16.63(4)(c)2.e.
e. Whether the seller is responsible for collecting payments due under the tobacco settlement revenues or for otherwise enforcing any of the tobacco settlement revenues or retains legal title to the tobacco settlement revenues for the purpose of these collection activities.
16.63(4)(c)2.f.
f. The treatment of the sale, assignment, or transfer for tax purposes.
16.63(4)(c)3.
3. The sale, assignment, or transfer is perfected automatically as against 3rd parties, including any 3rd parties with liens created by operation of law or otherwise, upon attachment under
ch. 409.
16.63(4)(c)4.
4. Nothing in this subsection precludes consideration of the factors listed in
subd. 2. a. to
e. in determining whether the sale, assignment, or transfer is a sale for tax purposes. The characterization of the sale, assignment, or transfer as an absolute transfer under
subd. 1. may not be considered in determining whether the sale, assignment, or transfer is a sale for tax purposes.
16.63(5)
(5) If the secretary sells the state's right to receive any of the payments under the tobacco settlement agreement, the state pledges to and agrees with any purchaser or subsequent transferee of the state's right to receive any of the payments under the tobacco settlement agreement that the state will not limit or alter its powers to fulfill the terms of the tobacco settlement agreement, nor will the state in any way impair the rights and remedies provided under the tobacco settlement agreement. The state also pledges to and agrees with any purchaser or subsequent transferee of the state's right to receive any of the payments under the tobacco settlement agreement that the state will pay all costs and expenses in connection with any action or proceeding brought by or on behalf of the purchaser or any subsequent transferee related to the state's not fulfilling the terms of the tobacco settlement agreement. The secretary may include this pledge and agreement of the state in any contract that is entered into by the secretary under this section.
16.63(6)
(6) If the secretary sells the state's right to receive any of the payments under the tobacco settlement agreement, the state pledges to and agrees with any purchaser or subsequent transferee of the state's right to receive any of the payments under the tobacco settlement agreement that the state will not limit or alter the powers of the secretary under this section until any contract that is entered into under this section is fully performed, unless adequate provision is made by law for the protection of the rights and remedies of the purchaser or any subsequent transferee under the contract. The secretary may include this pledge and agreement of the state in any contract that is entered into by the secretary under this section.
16.63(8)
(8) This subsection and
subs. (8m) and
(9) shall govern all civil claims, suits, proceedings, and actions brought against the state relating to the sale of the state's right to receive any of the payments under the tobacco settlement agreement. If the state fails to comply with this section or the terms of any agreement relating to the sale of the state's right to receive any of the payments under the tobacco settlement agreement, an action to compel compliance may be commenced against the state.
16.63(8m)
(8m) If the recovery of a money judgment against the state is necessary to give the plaintiff in an action under
sub. (8) complete relief, a claim for the money damages may be joined with the claim commenced under
sub. (8).
16.63(9)
(9) Sections 16.007,
16.53, and
775.01 do not apply to claims against the state under
sub. (8) or
(8m). If there is a final judgment against the state in such an action, the judgment shall be paid as provided in
s. 775.04 together with interest at the rate of 10 percent per year from the date such payment was judged to have been due until the date of payment of the judgment.
16.64
16.64
College tuition and expenses program. 16.64(1)
(1)
Definitions. In this section:
16.64(1)(a)
(a) “Board" means the board of regents of the University of Wisconsin System.
16.64(1)(b)
(b) “Institution of higher education" means an eligible educational institution, as defined under
26 USC 529.
16.64(2)
(2) Weighted average tuition; tuition unit cost. Annually, the department and the board jointly shall determine all of the following:
16.64(2)(a)
(a) The weighted average tuition of bachelor's degree-granting institutions within the University of Wisconsin System for the academic year that begins on or after the first day of August of the current year. The amount shall be calculated as follows:
16.64(2)(a)1.
1. For each such institution, multiply the tuition charged a full-time undergraduate who is a resident of this state by the number of full-time equivalent resident undergraduates attending the institution.
16.64(2)(a)3.
3. Divide the sum under
subd. 2. by the total number of full-time equivalent resident undergraduates attending such institutions.
16.64(2)(b)
(b) The price of a tuition unit, which shall be valid for a period determined jointly by the department and the board. The price shall be sufficient to ensure the ability of the department to meet its obligations under this section. To the extent possible, the price shall be set so that the value of the tuition unit in the anticipated academic year of its use will be equal to 1 percent of the weighted average tuition for that academic year plus the costs of administering the program under this section attributable to the unit.
16.64(3)
(3) College tuition and expenses contracts. 16.64(3)(a)(a) An individual, trust, legal guardian, or entity described under
26 USC 529 (e) (1) (C) may enter into a contract with the department for the sale of tuition units on behalf of a beneficiary.
16.64(3)(b)
(b) The contract shall specify the anticipated academic year of the beneficiary's initial enrollment in an institution of higher education.
16.64(3)(c)
(c) The department may charge a purchaser an enrollment fee.
16.64(3)(d)
(d) The department shall promulgate rules authorizing a person who has entered into a contract under this subsection to change the beneficiary named in the contract.
16.64(4)
(4) Number of tuition units purchased. A person who enters into a contract under
sub. (3) may purchase tuition units at any time and in any number, or may authorize a parent, grandparent, great-grandparent, aunt, or uncle of the beneficiary to purchase tuition units, except that the total number of tuition units purchased on behalf of a single beneficiary may not exceed the number necessary to cover tuition, fees and the costs of room and board, books, supplies and equipment required for enrollment or attendance of the beneficiary at an institution of higher education.
16.64(5)(a)(a) Except as provided in
sub. (7m), if an individual named as beneficiary in a contract under
sub. (3) attends an institution of higher education in the United States, each tuition unit purchased on his or her behalf entitles that beneficiary to apply toward the payment of tuition, fees and the costs of room and board, books, supplies and equipment required for enrollment or attendance at the institution an amount equal to 1 percent of the anticipated weighted average tuition of bachelor's degree-granting institutions within the University of Wisconsin System for the year of attendance, as estimated under
sub. (2) in the year in which the tuition unit was purchased.
16.64(5)(b)
(b) Upon request by the beneficiary, the department shall pay to the institution or beneficiary, whichever is appropriate, in each semester of attendance the lesser of the following:
16.64(5)(b)1.
1. An amount equal to the value of each tuition unit, as determined under
par. (a), multiplied by the number of tuition units purchased on behalf of the beneficiary and not used.
16.64(5)(b)2.
2. An amount equal to the sum of the institution's tuition, fees and the costs described in
par. (a) for that semester.
16.64(6)(a)(a) A contract under
sub. (3) may be terminated by the person entering into the contract if any of the following occurs:
16.64(6)(a)1.
1. The beneficiary dies or is permanently disabled.
16.64(6)(a)2.
2. The beneficiary graduates from high school but is unable to gain admission to an institution of higher education after a good faith effort.
16.64(6)(a)3.
3. The beneficiary attended an institution of higher education but involuntarily failed to complete the program in which he or she was enrolled.
16.64(6)(a)4.
4. The beneficiary is at least 18 years old and one of the following applies:
16.64(6)(a)4.b.
b. The beneficiary has decided not to attend an institution of higher education.
16.64(6)(a)4.c.
c. The beneficiary attended an institution of higher education but voluntarily withdrew without completing the program in which he or she was enrolled.
16.64(6)(a)5.
5. Other circumstances determined by the department to be grounds for termination.
16.64(6)(b)
(b) The department may terminate a contract under
sub. (3) if any of the tuition units purchased under the contract remain unused 10 years after the anticipated academic year of the beneficiary's initial enrollment in an institution of higher education, as specified in the contract.
16.64(7)(a)(a) Except as provided in
sub. (7m), the department shall do all of the following:
16.64(7)(a)1.
1. When a beneficiary completes the program in which he or she is enrolled, if the beneficiary has not used all of the tuition units purchased on his or her behalf, refund to the person who entered into the contract an amount equal to 1 percent of the anticipated weighted average tuition in the academic year in which the beneficiary completed the program, as estimated under
sub. (2) in the year in which the tuition units were purchased, multiplied by the number of tuition units purchased by the person and not used by the beneficiary.
16.64(7)(a)2.
2. If a contract is terminated under
sub. (6) (a) 1.,
2. or
3., refund to the person who entered into the contract an amount equal to 1 percent of the anticipated weighted average tuition in the academic year in which the contract is terminated, as estimated under
sub. (2) in the year in which the tuition units were purchased, multiplied by the number of tuition units purchased by the person and not used by the beneficiary.
16.64(7)(a)3.
3. If a contract is terminated under
sub. (6) (a) 4. or
(b), refund to the person who entered into the contract an amount equal to 99 percent of the amount determined under
subd. 2.
16.64(7)(a)4.
4. If a contract is terminated under
sub. (6) (a) 5., refund to the person who entered into the contract the amount under
subd. 2. or under
subd. 3., as determined by the department.
16.64(7)(a)5.
5. If the beneficiary is awarded a scholarship, tuition waiver or similar subsidy that cannot be converted into cash by the beneficiary, refund to the person who entered into the contract, upon the person's request, an amount equal to the value of the tuition units that are not needed because of the scholarship, waiver or similar subsidy and that would otherwise have been paid by the department on behalf of the beneficiary during the semester in which the beneficiary is enrolled.
16.64(7)(b)
(b) The department shall determine the method and schedule for the payment of refunds under this subsection.
16.64(7m)
(7m) Tuition unit value adjustment; refund adjustment. 16.64(7m)(a)(a) The department may adjust the value of a tuition unit based on the actual earnings attributable to the tuition unit less the costs of administering the program under this section that are attributable to the tuition unit if any of the following applies:
16.64(7m)(a)1.
1. The individual named as the beneficiary in a contract under
sub. (3) wishes to use the tuition unit for the payment of tuition in a year other than the anticipated academic year of attendance, as specified in the contract.
16.64(7m)(a)2.
2. The individual named as the beneficiary in a contract under
sub. (3), or the person who entered into the contract, wishes to receive a refund under
sub. (7) in a year other than the anticipated academic year of the beneficiary's attendance, as specified in the contract.
16.64(7m)(b)
(b) The department may not increase the value of a tuition unit under
par. (a) to an amount that exceeds the value of a tuition unit that was purchased at a similar time, held for a similar period and used or refunded in the anticipated academic year of the beneficiary's attendance, as specified in the contract.
16.64(7m)(c)
(c) The department may promulgate rules imposing or increasing penalties for refunds under
sub. (7) (a) if the department determines that such rules are necessary to maintain the status of the program under this section as a qualified state tuition program under section
529 of the Internal Revenue Code, as defined in
s. 71.01 (6).
16.64(8)
(8) Exemption from garnishment, attachment and execution. Moneys deposited in the tuition trust fund and a beneficiary's right to the payment of tuition, fees and the costs described in
sub. (5) (a) under this section are not subject to garnishment, attachment, execution or any other process of law.
16.64(9)
(9) Contract with actuary. The department shall contract with an actuary or actuarial firm to evaluate annually whether the assets in the tuition trust fund are sufficient to meet the obligations of the department under this section and to advise the department on setting the price of a tuition unit under
sub. (2) (b).
16.64(10)(a)(a) Annually, the department shall submit a report to the governor, and to the appropriate standing committees of the legislature under
s. 13.172 (3), on the program under this section. The report shall include any recommendations for changes to the program that the department determines are necessary to ensure the sufficiency of the tuition trust fund to meet the department's obligations under this section.
16.64(10)(b)
(b) The department shall submit a quarterly report to the state investment board projecting the future cash flow needs of the tuition trust fund. The state investment board shall invest moneys held in the tuition trust fund in investments with maturities and liquidity that are appropriate for the needs of the fund as reported by the department in its quarterly reports. All income derived from such investments shall be credited to the fund.
16.64(11)(a)(a) Nothing in this section guarantees an individual's admission to, retention by or graduation from any institution of higher education.
16.64(11)(b)
(b) The requirements to pay tuition, fees and the costs of room and board, books, supplies and equipment under
sub. (5) and to make refunds under
sub. (7) are subject to the availability of sufficient assets in the tuition trust fund.
16.64(11m)
(11m) Financial aid calculations. The value of tuition units shall not be included in the calculation of a beneficiary's eligibility for state financial aid for higher education if the beneficiary notifies the higher educational aids board and the institution of higher education that the beneficiary is planning to attend that he or she is a beneficiary of a contract under this section and the contract owner agrees to release to the higher educational aids board and the institution of higher education information necessary for the calculation under this subsection.
16.64(12)(a)(a) The department shall do all of the following:
16.64(12)(a)1.
1. Annually publish a list of the institutions of higher education located in this state and the number of tuition units necessary to pay for one year of full-time attendance as a resident undergraduate at each institution.
16.64(12)(a)3.
3. Promulgate rules to implement and administer this section.
