(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. (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. (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. (4) NO MINIMUM ISSUANCE PRICE. Revenue obligation bonds may be sold at any price or percentage of par value. (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. (6) AGREEMENTS AND ARRANGEMENTS; DELEGATION; USE OF REVENUE OBLIGATIONS. (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. (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). (c) Any revenue obligations may include revenue obligations contracted to fund interest, accrued or to accrue, on the revenue obligations. (d) With respect to any interest exchange agreement or agreements specified in par. (a), all of the following shall apply: 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. 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. 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: a. The conditions under which the commission may enter into the agreements. b. The form and content of the agreements. c. The aspects of risk exposure associated with the agreements. d. The standards and procedures for counterparty selection. e. The standards for the procurement of, and the setting aside of reserves, if any, in connection with, the agreements. f. The provisions, if any, for collateralization or other requirements for securing any counterparty’s obligations under the agreements. g. A system for financial monitoring and periodic assessment of the agreements. (e) 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: 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. 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. 2. Subdivision 1. shall not apply if either of the following occurs: 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. 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. 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. (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: 1. A description of each agreement, including a summary of its terms and conditions, rates, maturity, and the estimated market value of each agreement. 2. An accounting of amounts that were required to be paid and received on each agreement. 3. Any credit enhancement, liquidity facility, or reserves, including an accounting of the costs and expenses incurred by the state. 4. A description of the counterparty to each agreement. 5. A description of the counterparty risk, the termination risk, and other risks associated with each agreement.
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