2023 Wisconsin Statutes & Annotations › Chapter 18 - State debt, revenue obligations and operating notes. › 18.561 - Enterprise obligations.

18.561
Enterprise obligations.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
History:  1999 a. 9 ss. 133 to 141; 2001 a. 16; 2003 a. 33.