18.60 Refunding obligations.

(1) The commission may authorize, for any one or more of the purposes described in s. 18.53 (1), the issuance of revenue-obligation refunding obligations. Refunding obligations may be issued, subject to any contract rights vested in owners of obligations or notes being refinanced, to refinance more than one issue of obligations or notes notwithstanding that the obligations or notes may have been issued at different times for different purposes and may be secured by the property or income of more than one enterprise or program or special fund or may be public debt or building-corporation indebtedness. The principal amount of refunding obligations shall not exceed the sum of: the principal amount of the obligations or notes being refinanced; applicable redemption premiums; unpaid interest on the obligations or notes to the date of delivery or exchange of the refunding obligations; in the event the proceeds are to be deposited in trust as provided in sub. (3), interest to accrue on the obligations or notes from the date of delivery to the date of maturity or to the redemption date selected by the commission, whichever is earlier; and the expenses incurred in the issuance of the refunding obligations and the payment of the obligations or notes. A determination by the commission that a refinancing is advantageous or that any of the amounts provided in the preceding sentence should be included in the refinancing shall be conclusive.

(2) If the commission determines to exchange refunding obligations, they may be exchanged privately for and in payment and discharge of any of the outstanding obligations or notes being refinanced. Refunding obligations may be exchanged for such principal amount of the obligations or notes being exchanged therefore as may be determined by the commission to be necessary or advisable. The owners of the obligations or notes being refunded who elect to exchange need not pay accrued interest on the refunding obligations if and to the extent that interest is accrued and unpaid on the obligations or notes being refunded and to be surrendered. If any of the obligations or notes to be refinanced are to be called for redemption, the commission shall determine which redemption dates shall be used, if more than one date is applicable and shall, prior to the issuance of the refunding obligations, provide for notice of redemption to be given in the manner and at the times required by the proceedings authorizing the outstanding obligations or notes.

(3) The principal proceeds from the sale of any refunding obligations shall be applied either to the immediate payment and retirement of the obligations or notes being refinanced or, if the obligations or notes have not matured and are not presently redeemable, to the creation of a trust for and shall be pledged to the payment of the obligations or notes being refinanced. If a trust is created, a separate deposit shall be made for each issue of obligations or notes being refinanced. Each deposit shall be with the secretary of administration or a bank or trust company that is then a member of the federal deposit insurance corporation. If the total amount of any deposit, including money other than sale proceeds but legally available for such purpose, is less than the principal amount of the obligations or notes being refinanced and for the payment of which the deposit has been created and pledged, together with applicable redemption premiums and interest accrued and to accrue to maturity or to the date of redemption, then the application of the sale proceeds shall be legally sufficient only if the money deposited is invested in securities issued by the United States or one of its agencies, or securities fully guaranteed by the United States, and only if the principal amount of the securities at maturity and the income therefrom to maturity will be sufficient and available, without the need for any further investment or reinvestment, to pay at maturity or upon redemption the principal amount of the obligations or notes being refinanced together with applicable redemption premiums and interest accrued and to accrue to maturity or to the date of redemption. The income from the principal proceeds of the securities shall be applied solely to the payment of the principal of and interest and redemption premiums on the obligations or notes being refinanced, but provision may be made for the pledging and disposition of any surplus. Nothing in this subsection shall be construed as a limitation on the duration of any deposit in trust for the retirement of obligations or notes being refinanced, but which have not matured and which are not presently redeemable. Nothing in this subsection shall be construed to prohibit reinvestment of the income of a trust if the reinvestments will mature at such times that sufficient cash will be available to pay interest, applicable premiums, and principal on the obligations or notes being refinanced.

(4) The commission may in addition to the other powers conferred by this subchapter, include a provision in any authorizing resolution for refunding obligations pledging all or any part of the special fund or income of any enterprise or program originally financed from the proceeds of any of the obligations or notes being refinanced, or pledging all or any part of the surplus income derived from the investment of any trust created under sub. (3), or both.

(5) All of the following provisions that are not inconsistent with the express provisions of this section shall apply to refunding obligations, except that the maximum permissible term shall be 50 years from the date of original issue of the oldest note or obligation issue being refunded:

(a) Section 18.56.

(b) In the case of enterprise obligations, s. 18.561.

(c) In the case of special fund obligations, s. 18.562.

History: 1977 c. 29; 1999 a. 9; 2003 a. 33.