18.52(3)
(3) “Evidence of revenue obligation" means a written promise to pay a revenue obligation.
18.52(4)
(4) “Public debt" means every voluntary, unconditional undertaking by the state to repay a certain amount of borrowed money:
18.52(4)(a)
(a) Out of the state treasury, except a loan or advance by any state agency or fund to any other state agency or fund; or
18.52(4)(b)
(b) For which any existing asset of the state is pledged, except the pledge of an outstanding evidence of indebtedness without recourse.
18.52(5)
(5) “Revenue obligation" means an enterprise obligation or a special fund obligation. A revenue obligation may be both an enterprise obligation and a special fund obligation.
18.52(6)
(6) “Revenue-producing enterprise" or “program" means every state enterprise or program deemed by the legislature to be likely to produce sufficient net income to pay when due the principal and interest of revenue obligations to be issued in connection therewith.
18.52(7)
(7) “Special fund obligation" means every undertaking by the state to repay a certain amount of borrowed money that is all of the following:
18.52(7)(a)
(a) Payable from a special fund consisting of fees, penalties or excise taxes.
18.52(8)
(8) “Special fund program" means a state program or purpose with respect to which the legislature has determined that financing with special fund obligations is appropriate and will serve a public purpose.
18.53
18.53
Purposes of revenue obligations and amounts. 18.53(1)(1)
The commission may authorize money to be borrowed and evidences of revenue obligation to be issued therefor in an amount sufficient to fund or refund, as provided in s.
18.60, the whole or any part of:
18.53(1)(a)
(a) Any revenue obligation issued under this subchapter.
18.53(2)
(2) The commission may authorize money to be borrowed and evidences of revenue obligation to be issued therefor, in an amount sufficient, as provided in s.
18.59:
18.53(2)(a)
(a) To anticipate the sale of revenue-obligation bonds.
18.53(2)(b)
(b) To renew the whole or any part of any revenue-bond anticipation notes then outstanding.
18.53(3)
(3) The commission shall authorize money to be borrowed and evidences of revenue obligation to be issued. The requirements for funds shall be established by the state department or agency head carrying out program responsibilities for which the revenue obligations have been authorized by the legislature, but shall not exceed the following:
18.53(3)(a)
(a) In the case of enterprise obligations, the amounts specified by the legislature to purchase, acquire, lease, construct, extend, expand, add to, improve, conduct, control, operate or manage such revenue-producing enterprises or programs as are specified by the legislature.
18.53(3)(b)
(b) In the case of special fund obligations, the amount specified by the legislature for such expenditures to be paid from special fund obligations.
18.53(4)
(4) Unless otherwise provided in laws applicable to the issuance of a specific revenue obligation, in addition to the requirements established under sub.
(3), the commission shall establish the amounts required for ancillary payments and establishment of reserves relating to the revenue obligations.
18.54
18.54
Limitations on revenue obligations. 18.54(1)(1)
The amount of evidences of revenue obligation issued or outstanding for the purposes specified in s.
18.53 (1) and
(2) are subject only to the limits provided in this subchapter.
18.54(2)
(2) The amount of evidences of revenue obligation issued or outstanding for purposes specified by the legislature under s.
18.53 (3) and
(4) are subject only to the limits provided in the legislation which authorizes that revenue obligation. No refunding obligation is subject to any limitation specified by that legislation.
18.55(1)(1)
Authorizing resolution. No money may be borrowed under this subchapter nor any evidence of revenue obligation issued by the state except pursuant to an authorizing resolution. Each authorizing resolution shall state each purpose of the revenue obligation it authorizes, which need not be more specific but shall not be more general than those purposes provided in or pursuant to law, and the maximum principal amount of revenue obligations authorized for each such purpose.
18.55(2)
(2) Bond anticipation notes. Revenue-obligation bond anticipation notes may be sold at public or private sale or, in the case of renewal notes, exchanged privately for and in payment and discharge of any of the outstanding notes being renewed, as provided in the authorizing resolution.
18.55(3)
(3) Revenue obligations. Revenue obligations may be sold at either public or private sale. The commission may provide in the authorizing resolution for refunding obligations that they be exchanged privately in payment and discharge of any of the outstanding bonds or notes being refunded. All revenue obligations sold at public sale shall be noticed as provided in the authorizing resolution. Any or all bids received at public sale may be rejected.
18.55(4)
(4) No minimum issuance price. Revenue obligation bonds may be sold at any price or percentage of par value.
18.55(5)
(5) Exercise of authority. Money may be borrowed and evidences of revenue obligation issued therefor pursuant to one or more authorizing resolutions, unless otherwise provided in the resolution or in this subchapter, at any time and from time to time, for any combination of purposes, in any specific amounts, at any rates of interest, for any term, payable at any intervals, at any place, in any manner and having any other terms or conditions deemed necessary or useful. Revenue obligation bonds may bear interest at variable or fixed rates, bear no interest or bear interest payable only at maturity or upon redemption prior to maturity. Unless sooner exercised or unless a different period is provided in the resolution, every authorizing resolution, except as provided in s.
18.59 (1), shall expire one year after the date of its adoption.
18.55(6)
(6) Agreements and arrangements; delegation; use of revenue obligations. 18.55(6)(a)
(a) Subject to pars.
(d) and
(e), at the time of, or in anticipation of, contracting revenue obligations and at any time thereafter while the revenue obligations are outstanding, the commission may enter into agreements and ancillary arrangements relating to the revenue obligations, including trust indentures, liquidity facilities, remarketing or dealer agreements, letter of credit agreements, insurance policies, guaranty agreements, reimbursement agreements, indexing agreements, or interest exchange agreements. Any payment made or received pursuant to any such agreements or ancillary arrangements shall be made from or deposited into a fund relating to the relevant revenue obligation, as determined by the commission. The determination of the commission included in an interest exchange agreement that such an agreement relates to a revenue obligation shall be conclusive.
18.55(6)(b)
(b) The commission may delegate to other persons the authority and responsibility to take actions necessary and appropriate to implement agreements and ancillary arrangements under par.
(a).
18.55(6)(c)
(c) Any revenue obligations may include revenue obligations contracted to fund interest, accrued or to accrue, on the revenue obligations.
18.55(6)(d)
(d) With respect to any interest exchange agreement or agreements specified in par.
(a), all of the following shall apply:
18.55(6)(d)1.
1. The commission shall contract with an independent financial consulting firm to determine if the terms and conditions of the agreement reflect a fair market value, as of the proposed date of the execution of the agreement.
18.55(6)(d)2.
2. The interest exchange agreement must identify by maturity, bond issue, or bond purpose the obligation to which the agreement is related. The determination of the commission included in an interest exchange agreement that such agreement relates to an obligation shall be conclusive.
18.55(6)(d)3.
3. The resolution authorizing the commission to enter into any interest exchange agreement shall require that the terms and conditions of the agreement reflect a fair market value as of the date of execution of the agreement, as reflected by the determination of the independent financial consulting firm under subd.
1., and shall establish guidelines for any such agreement, including the following:
18.55(6)(d)3.a.
a. The conditions under which the commission may enter into the agreements.
18.55(6)(d)3.c.
c. The aspects of risk exposure associated with the agreements.
18.55(6)(d)3.d.
d. The standards and procedures for counterparty selection.
18.55(6)(d)3.e.
e. The standards for the procurement of, and the setting aside of reserves, if any, in connection with, the agreements.
18.55(6)(d)3.f.
f. The provisions, if any, for collateralization or other requirements for securing any counterparty's obligations under the agreements.
18.55(6)(d)3.g.
g. A system for financial monitoring and periodic assessment of the agreements.
18.55(6)(e)1.1. Subject to subd.
2., the terms and conditions of an interest exchange agreement under par.
(a) shall not be structured so that, as of the trade date of the agreement, both of the following are reasonably expected to occur:
18.55(6)(e)1.a.
a. The aggregate expected debt service and net exchange payments relating to the agreement during the fiscal year in which the trade date occurs will be less than the aggregate expected debt service and net exchange payments relating to the agreement that would be payable during that fiscal year if the agreement is not executed.
18.55(6)(e)1.b.
b. The aggregate expected debt service and net exchange payments relating to the agreement in subsequent fiscal years will be greater than the aggregate expected debt service and net exchange payments relating to the agreement that would be payable in those fiscal years if the agreement is not executed.
18.55(6)(e)2.
2. Subdivision
1. shall not apply if either of the following occurs:
18.55(6)(e)2.a.
a. The commission receives a determination by the independent financial consulting firm under par.
(d) 1. that the terms and conditions of the agreement reflect payments by the state that represent on-market rates as of the trade date for the particular type of agreement.
18.55(6)(e)2.b.
b. The commission provides written notice to the joint committee on finance of its intention to enter into an agreement that is reasonably expected to satisfy subd.
1., and the joint committee on finance either approves or disapproves, in writing, the commission's entering into the agreement within 14 days of receiving the written notice from the commission.
18.55(6)(e)3.
3. This paragraph shall not limit the liability of the state under an agreement if actual contracted net exchange payments in any fiscal year are less than or exceed original expectations.
18.55(6)(f)
(f) Semiannually, during any year in which the state is a party to an agreement entered into pursuant to par.
(a), the department of administration shall submit a report to the commission and to the cochairpersons of the joint committee on finance listing all such agreements. The report shall include all of the following:
18.55(6)(f)1.
1. A description of each agreement, including a summary of its terms and conditions, rates, maturity, and the estimated market value of each agreement.
18.55(6)(f)2.
2. An accounting of amounts that were required to be paid and received on each agreement.
18.55(6)(f)3.
3. Any credit enhancement, liquidity facility, or reserves, including an accounting of the costs and expenses incurred by the state.
18.55(6)(f)4.
4. A description of the counterparty to each agreement.
18.55(6)(f)5.
5. A description of the counterparty risk, the termination risk, and other risks associated with each agreement.
18.56
18.56
Revenue obligations. The commission may authorize, for any of the purposes described in s.
18.53 (3), the issuance of revenue obligations. The revenue obligations shall mature at any time not exceeding 50 years from the date thereof as the commission shall determine. The revenue obligations shall be payable only out of the redemption fund provided under s.
18.561 (5) or
18.562 (3) and each revenue obligation shall contain on its face a statement to that effect. A revenue obligation may contain a provision authorizing redemption, in whole or in part, at stipulated prices, at the option of the commission and shall provide the method of redeeming the revenue obligations.
18.56 Annotation
A federal provision subjecting interest on unregistered state and local bonds to federal income tax does not violate the 10th amendment or the intergovernmental tax immunity doctrine. South Carolina v. Baker,
485 U.S. 505 (1988).
18.561
18.561
Enterprise obligations. 18.561(1)(1)
Payment with revenue obligations. The state and a contracting party may provide, in any contract for purchasing or acquiring a revenue-producing enterprise or program, that payment shall be made in revenue obligations.
18.561(2)
(2) Security interests of owners of enterprise obligations. There is a mortgage lien upon or security interest in the income and property of each revenue-producing enterprise or program for the benefit of the owners of the related enterprise obligations. No physical delivery, recordation or other action is required to perfect the security interest. The income and property of the revenue-producing enterprise or program shall remain subject to the lien until provision for payment in full of the principal and interest of the enterprise obligations has been made, as provided in the authorizing resolution. Any owner of such enterprise obligations may either at law or in equity protect and enforce the lien and compel performance of all duties required by this section. If there is any default in the payment of the principal or interest of any of such enterprise obligations, any court having jurisdiction of the action may appoint a receiver to administer the revenue-producing enterprise or program on behalf of the state and the owners of the enterprise obligations, with power to charge and collect rates sufficient to provide for the payment of the operating expenses and also to pay any enterprise obligations outstanding against the revenue-producing enterprise or program, and to apply the income and revenues thereof in conformity with this subchapter and the authorizing resolution, or the court may declare the whole amount of the enterprise obligations due and payable, if such relief is requested, and may order and direct the sale of the revenue-producing enterprise or program. Under any sale so ordered, the purchaser shall be vested with an indeterminate permit to maintain and operate the revenue-producing enterprise or program. The legislature may provide for additions, extensions and improvements to a revenue-producing enterprise or program to be financed by additional issues of enterprise obligations as provided by this section. Such additional issues of enterprise obligations shall be subordinate to all prior related issues of enterprise obligations which may have been made under this section, unless the legislature, in the statute authorizing the initial issue of enterprise obligations, permits the issue of additional enterprise obligations on a parity therewith.
18.561(3)
(3) Dedication of revenues. As accurately as possible in advance, the commission and the state department or agency carrying out program responsibilities for which enterprise obligations are to be issued shall determine, and the commission shall fix in the authorizing resolution for such enterprise obligations: the proportion of the revenues of the revenue-producing enterprise or program which shall be necessary for the reasonable and proper operation and maintenance thereof; the proportion of the revenues which shall be set aside as a proper and adequate replacement and reserve fund; and the proportion of the revenues which shall be set aside and applied to the payment of the principal and interest of the enterprise obligations, and shall provide that the revenues be set aside in separate funds. At any time after one year's operation, the state department or agency and the commission may recompute the proportion of the revenues which shall be assignable under this subsection based upon the experience of operation or upon the basis of further financing.
18.561(4)
(4) Replacement and reserve fund. The proportion set aside to the replacement and reserve fund shall be available and shall be used, whenever necessary, to restore any deficiency in the redemption fund for the payment of the principal and interest due on enterprise obligations and for the creation and maintenance of any reserves established by the authorizing resolution to secure such payments. At any time when the redemption fund is sufficient for said purposes, moneys in the replacement and reserve fund may, subject to available appropriations, be expended either in the revenue-producing enterprise or program or in new acquisitions, constructions, extensions, additions, expansions or improvements. Any accumulations of the replacement and reserve fund may be invested as provided in this subchapter, and if invested, the income from the investment shall be carried in the replacement and reserve fund.
18.561(5)
(5) Redemption fund. The proportion which shall be set aside for the payment of the principal of and interest on the enterprise obligations and, as directed by the commission, payments to be received with respect to an agreement or ancillary arrangement entered into pursuant to s.
18.55 (6), shall, at such times as provided in the authorizing resolution, be set apart and paid into a separate fund in the treasury or in an account maintained by a trustee appointed for that purpose in the authorizing resolution to be identified as “the ... redemption fund". Each redemption fund shall be expended, and all moneys from time to time on hand therein are irrevocably appropriated, in sums sufficient, only for the payment of principal of and interest on the enterprise obligations giving rise to it and premium, if any, due upon redemption of any such obligations, and for payment of obligations under an agreement or ancillary arrangement entered into under s.
18.55 (6) to the extent provided for in an authorizing resolution. Moneys in the redemption 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) (dr). All such investments shall be the exclusive property of the fund and all earnings on or income from such investments shall be credited to the fund.
18.561(6)
(6) Redemption fund surplus. If any surplus is accumulated in any of the redemption funds, subject to any contract rights vested in owners of enterprise obligations secured thereby, it shall be paid over to the treasury.
18.561(7)
(7) Payment for services. The reasonable cost and value of any service rendered to the state by a revenue-producing enterprise or program shall be charged against the state and shall be paid for by it in periodic installments, subject to available appropriations.
18.561(8)
(8) Rates for services. 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.
18.561(9)
(9) Authorizing resolution. The commission may provide in the authorizing resolution for enterprise obligations or by subsequent action all things necessary to carry into effect this section. Any authorizing resolution shall constitute a contract with the owners of any enterprise obligations issued pursuant to the resolution. Any authorizing resolution may contain such provisions or covenants, without limiting the generality of the power to adopt the resolution, as are deemed necessary or desirable for the security of the owners of enterprise obligations or the marketability of the enterprise obligations.
18.561(10)
(10) Sinking fund. The authorizing resolution may set apart enterprise obligations 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 interest. If the instrument does not make any provision for a sinking fund, the resolution shall fix and determine the amount that shall be set aside into the sinking 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. Enterprise obligations 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 enterprise obligations 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 owner of the secured obligation or charge. 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 enterprise obligations 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.
18.561 History
History: 1999 a. 9 ss.
133 to
141;
2001 a. 16;
2003 a. 33.
18.562
18.562
Special fund obligations. 18.562(1)(1)
Security interest in special fund. 18.562(1)(a)(a) There is a security interest, for the benefit of the owners of the special fund obligations and other persons specified in the authorizing resolution providing for the issuance of the particular special fund obligations, in the amounts that arise after the creation of the special fund program in the special fund related to the special fund obligations. For this purpose, amounts in the special fund shall be accounted for on a first-in, first-out basis, and no physical delivery, recordation, or other action is required to perfect the security interest.
18.562(1)(b)1.1. Except as provided in subd.
2., the security interest for the benefit of the owners of the special fund obligations and other persons specified in the authorizing resolution providing for the issuance of the particular special fund obligations shall have priority over all conflicting security interests to the fees, penalties, or excise taxes that are required to be deposited in the special fund.
18.562(1)(b)2.
2. For different special fund obligations secured by the same fees, penalties, or excise taxes, priority shall be established according to the date of issuance of the special fund obligation or the incurrence of the other obligations specified in an authorizing resolution, if applicable, with earlier issuances or incurrences having priority over later issuances or incurrences, unless laws governing the issuance of a particular special fund obligation or the authorizing resolution providing for the issuance of a particular special fund obligation permit later issuances or incurrences on a parity or priority basis.
18.562(1)(c)
(c) The special fund shall remain subject to the security interest until provision for payment in full of the principal and interest of the special fund obligations, and other obligations specified in the authorizing resolution providing for the issuance of the particular special fund obligations, has been made, as provided in the authorizing resolution.
18.562(1)(d)
(d) An owner of special fund obligations may either at law or in equity protect and enforce the security interest and compel performance of all duties required by this section.
18.562(2)
(2) Use of special fund moneys. The commission and the state agency carrying out the special fund program responsibilities shall jointly determine, and the commission shall fix in the authorizing resolution for the obligations, the conditions under which money in the special fund shall be set aside and applied to the payment of the principal and interest of the obligations, deposited in funds established under the authorizing resolution or made available for other purposes.
18.562(3)
(3) Redemption fund. The special fund revenues that are to be set aside for the payment of the principal of and interest on the special fund obligations and, as directed by the commission, payments to be received with respect to an agreement or ancillary arrangement entered into under s.
18.55 (6), shall be paid into a separate fund in the treasury or in an account maintained by a trustee appointed for that purpose in the authorizing resolution to be identified as “the ... redemption fund". Each redemption fund shall be expended, and all moneys from time to time on hand therein are irrevocably appropriated, in sums sufficient, only for the payment of principal of and interest on the special fund obligations giving rise to it and premium, if any, due upon redemption of any such obligations, and for payment of obligations under an agreement or ancillary arrangement entered into under s.
18.55 (6) to the extent provided for in an authorizing resolution. Moneys in the redemption 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) (dr). All such investments shall be the exclusive property of the fund and all earnings on or income from such investments shall be credited to the fund.
