229.50 Special debt service reserve funds.
(1) Establishment of special debt service reserve funds. A district may establish one or more special funds to secure its bonds, referred to in this subchapter as special debt service reserve funds, if, prior to each issuance of bonds to be secured by the special debt service reserve fund, the secretary of administration determines that all of the following conditions are met with respect to the bonds:
(a) Substantial statewide public purpose. The proceeds of the bonds, other than refunding bonds, will be used in connection with an exposition center, or an exposition center facility used primarily to support the activities of an exposition center, or a sports and entertainment arena, or sports and entertainment arena facilities, that serves a substantial statewide public purpose. An exposition center serves a substantial statewide public purpose if all of the following conditions are met:
1. Each sponsoring municipality of the district adopts a resolution that certifies that the exposition center meets all of the following conditions:
a. The exposition center includes or will include an exhibition hall of at least 100,000 square feet.
b. The exposition center is reasonably projected to support at least 2,000 full-time equivalent jobs.
c. The exposition center is reasonably projected to stimulate at least $6,500,000,000 in total spending in the state over the 30-year period beginning on the date on which the bonds are issued.
d. The exposition center is reasonably projected to attract at least 50,000 out-of-state visitors annually.
e. The exposition center is reasonably projected to generate at least $150,000,000 of incremental state income, franchise and sales tax revenues over the 30-year period beginning on the date on which the bonds are issued.
2. Each sponsoring municipality sends a copy of the resolution adopted under subd. 1. to the secretary of administration and the secretary of revenue.
3. Neither the secretary of administration nor the secretary of revenue determines that a resolution provided under subd. 2. does not meet the conditions under subd. 1. If a secretary makes a determination under this subdivision, the secretary shall provide written notice of his or her determination and the reasons for his or her determination to each sponsoring municipality of the district within 30 days after receiving a copy of all resolutions under subd. 2. A determination under this subdivision is not subject to review under ch. 227, but sponsoring municipalities may resubmit resolutions under subd. 1. at any time after a secretary issues a determination under this subdivision.
(b) Feasibility. The proceeds of bonds, other than refunding bonds, will be used for feasible projects and there is a reasonable likelihood that the bonds will be repaid without the necessity of drawing on funds in the special debt service reserve fund that secures the bonds. The secretary of administration may not make the determinations required under this paragraph unless a majority of the authorized members of the district's board has voted that, if the balance in a special debt service reserve fund of the district is less than the requirement under sub. (5), the room tax imposed by the district under s. 66.0615 (1m) (b) is 3 percent of total room charges and the food and beverages tax imposed by the district under s. 77.981 is 0.5 percent of gross receipts. In addition, the secretary of administration may make the determinations required under this paragraph only after considering all of the following:
1. Whether a pledge of the gross tax revenues of the district is made under the bond resolution.
2. Whether the tax revenues of the district will be paid directly to the trustee of the bonds.
3. Revenue projections for the projects to be financed by the bonds and the reasonableness of the assumptions on which these revenue projections are based.
4. The proposed interest rates of the bonds and the resulting cash-flow requirements.
5. Whether the projected ratio of annual tax revenues to annual debt service of the district, taking into account capitalized interest, is 135 percent or greater.
6. Whether an understanding exists providing for repayment by the district to the state of all amounts appropriated to the special debt service reserve fund pursuant to sub. (7).
7. Whether the district has agreed to provide the department of administration with all financial reports of the district and all regular monthly statements of the trustee of the bonds on a direct and ongoing basis.
8. Whether the district has agreed that the department of administration will have direct and immediate access, at any time and without notice, to all records of the district.
(c) Limit on bonds issued.
1. The amount of all bonds, other than refunding bonds, that would be secured by all special debt service reserve funds of the district will not exceed $200,000,000.
2. On July 5, 2019, the amount specified in subd. 1. is increased by $100,000,000.
(d) Use of net proceeds.
1. Not more than $170,000,000 of the total net proceeds of all bonds, other than refunding bonds, that would be secured by all special debt service reserve funds of the district will be used for the purposes specified under s. 229.48 (1) (a) to (c), except that no proceeds of the bonds secured by a special debt service reserve fund may be used to remodel or refurbish an existing exposition center or existing exposition center facilities transferred under a transfer agreement under s. 229.47 (1).
2. On July 5, 2019, the amount specified in subd. 1. is increased by $127,500,000.
(e) Date of issuance. The bonds, other than refunding bonds, will be issued no later than December 31, 2021.
(f) Transfer agreement. A sponsoring municipality of the district issuing the bonds has entered into a transfer agreement under s. 229.47 (1) that transfers to the district the sponsoring municipality's interests in an existing exposition center and exposition center facilities created under this subchapter or in an existing convention institution under s. 229.26.
(g) Refunding bonds. All refunding bonds to be secured by the special debt service reserve fund meet all of the following conditions:
1. The refunding bonds are to be issued to fund, refund or advance refund bonds secured by a special debt service reserve fund.
2. The refunding of bonds by the refunding bonds was determined by the secretary of administration not to adversely affect the risk that the state will be called on to make a payment under sub. (7).
(2) Payment of funds into a special debt service reserve fund. A district shall pay into each of these special debt service reserve funds any moneys appropriated and made available by the state for the purposes of the special debt service reserve fund, any proceeds of a sale of bonds to the extent provided in the bond resolution authorizing the issuance of the bonds and any other moneys that are made available to the district for the purpose of the special debt service reserve fund from any other source.
(3) Use of moneys in the special debt service reserve fund. All moneys held in any special debt service reserve fund of a district, except as otherwise specifically provided, shall be used, as required, solely for the payment of the principal of bonds secured in whole or in part by the special debt service reserve fund, the making of sinking fund payments with respect to these bonds, the purchase or redemption of these bonds, the payment of interest on these bonds or the payment of any redemption premium required to be paid when these bonds are redeemed prior to maturity. If moneys in a special debt service reserve fund at any time are less than the special debt service reserve fund requirement under sub. (5) for the debt service reserve fund, the district may not use these moneys for any optional purchase or optional redemption of the bonds. Any income or interest earned by, or increment to, any special debt service reserve fund due to the investment of moneys in the special debt service reserve fund may be transferred by the district to other funds or accounts of the district to the extent that the transfer does not reduce the amount of the special debt service reserve fund below the special debt service reserve fund requirement under sub. (5) for the special debt service reserve fund.
(4) Limitation on bonds secured by a special debt service reserve fund. A district shall accumulate in each special debt service reserve fund an amount equal to the special debt service reserve fund requirement under sub. (5) for the special debt service reserve fund. A district may not at any time issue bonds secured in whole or in part by a special debt service reserve fund if upon the issuance of these bonds the amount in the special debt service reserve fund will be less than the special debt service reserve fund requirement under sub. (5) for the special debt service reserve fund, unless the district, at the time that it issues the bonds, deposits in the special debt service reserve fund from the proceeds of the bond issuance, or from other sources, an amount that, together with the amount then in the special debt service reserve fund, will not be less than the special debt service reserve fund requirement under sub. (5) for the special debt service reserve fund.
(5) Special debt service reserve fund requirement. The special debt service reserve fund requirement for a special debt service reserve fund, as of any particular date of computation, is equal to an amount of money, as provided in the bond resolution authorizing the bonds with respect to which the special debt service reserve fund is established, that may not exceed the maximum annual debt service on the bonds of the district for that fiscal year or any future fiscal year of the district secured in whole or in part by that special debt service reserve fund. In computing the annual debt service for any fiscal year, bonds deemed to have been paid in accordance with the defeasance provisions of the bond resolution authorizing the issuance of the bonds shall not be included in bonds outstanding on such date of computation. The annual debt service for any fiscal year is the amount of money equal to the aggregate of all of the following calculated on the assumption that the bonds will, after the date of computation, cease to be outstanding by reason, but only by reason, of the payment of bonds when due, and the payment when due, and application in accordance with the bond resolution authorizing those bonds, of all of the sinking fund payments payable at or after the date of computation:
(a) All interest payable during the fiscal year on all bonds that are secured in whole or in part by the special debt service reserve fund and that are outstanding on the date of computation.
(b) The principal amount of all of the bonds that are secured in whole or in part by the special debt service reserve fund, are outstanding on the date of computation and mature during the fiscal year.
(c) All amounts specified in bond resolutions of the district authorizing any of the bonds that are secured in whole or in part by the special debt service reserve fund to be payable during the fiscal year as a sinking fund payment with respect to any of the bonds that mature after the fiscal year.
(6) Valuation of securities. In computing the amount of a special debt service reserve fund for the purposes of this section, securities in which all or a portion of the special debt service reserve fund is invested shall be valued at their fair market value.
(7) State moral obligation pledge. If at any time the special debt service reserve fund requirement under sub. (5) for a special debt service reserve fund exceeds the amount of moneys in the special debt service reserve fund, the board of directors of the district shall certify to the secretary of administration, the governor, the joint committee on finance and the governing body of the sponsoring municipality the amount necessary to restore the special debt service reserve fund to an amount equal to the special debt service reserve fund requirement under sub. (5) for the special debt service reserve fund. If this certification is received by the secretary of administration in an even-numbered year prior to the completion of the budget compilation under s. 16.43, the secretary shall include the certified amount in the budget compilation. In any case, the joint committee on finance shall introduce in either house, in bill form, an appropriation of the amount so certified to the appropriate special debt service reserve fund of the district. Recognizing its moral obligation to do so, the legislature hereby expresses its expectation and aspiration that, if ever called upon to do so, it shall make this appropriation. This subsection does not apply to reserve fund shortfalls related to bonds or any refunding bonds issued by the district to fund the construction of sports and entertainment arena facilities.
History: 1993 a. 263; 1999 a. 150 s. 672; 2015 a. 60; 2019 a. 9.