Wis. Stat. § 16.527
This is the official text of Wis. Stat. § 16.527, part of Wisconsin’s Wisconsin Statutes — the complete compiled statutory law of Wisconsin, organized into numbered chapters by subject.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
Appropriation obligations.
Official statutory text
(1) Legislative findings and determinations.
(a) Recognizing that the state, by prepaying part or all of the state’s unfunded prior service liability under s. 40.05 (2) (b) and the state’s unfunded liability under s. 40.05 (4) (b) , (bc) , and (bw) and subch. IX of ch. 40 , may reduce its costs and better ensure the timely and full payment of retirement benefits to participants and their beneficiaries under the Wisconsin Retirement System, the legislature finds and determines that it is in the public interest for the state to issue appropriation obligations to obtain proceeds to pay the state’s anticipated unfunded prior service liability under s. 40.05 (2) (b) and to pay part or all of the state’s unfunded prior service liability under s. 40.05 (2) (b) and the state’s unfunded liability under s. 40.05 (4) (b) , (bc) , and (bw) and subch. IX of ch. 40 .
(b) The legislature finds and determines that the purchase of any of the tobacco settlement revenues that had been sold by the secretary under s. 16.63 from the net proceeds of appropriation obligations issued under this section is appropriate and in the public interest and will serve a public purpose.
(2) Definitions. In this section:
(ad) “Aggregate expected debt service and net exchange payments” means the sum of the following:
1. The aggregate net payments expected to be made and received under a specified interest exchange agreement under sub. (4) (e) .
2. The aggregate debt service expected to be made on obligations related to that agreement.
3. The aggregate net payments expected to be made and received under all other interest exchange agreements under sub. (4) (e) relating to those obligations that are in force at the time of executing the agreement.
(am) “Appropriation obligation” means an undertaking by the state to repay a certain amount of borrowed money that is payable from all of the following:
1. Moneys annually appropriated by law for debt service due with respect to such undertaking in that year.
2. Proceeds of the sale of appropriation obligations described in sub. (3) (b) 3.
3. Payments received for that purpose under agreements and ancillary arrangements described in sub. (4) (e) .
4. Investment earnings on amounts in subds. 1. to 3.
(b) “Evidence of appropriation obligation” means a written promise to pay an appropriation obligation.
(c) “Refunding obligation” means an appropriation obligation contracted to fund or refund all or any part of one or more outstanding appropriation obligations.
(d) “Tobacco settlement agreement” has the meaning given in s. 16.63 (1) (b) .
(e) “Tobacco settlement revenues” has the meaning given in s. 16.63 (1) (c) .
(3) Authorization of appropriation obligations.
(a) The department shall have all powers necessary and convenient to carry out its duties, and exercise its authority, under this section.
(b)
1. Subject to the limitation under subd. 2. , the department may contract appropriation obligations of the state under this section for the purpose of paying part or all of the state’s unfunded prior service liability under s. 40.05 (2) (b) and the state’s unfunded liability under s. 40.05 (4) (b) , (bc) , and (bw) and subch. IX of ch. 40 .
2. The sum of appropriation obligations issued under this section for the purpose under subd. 1. , excluding any obligations that have been defeased under a cash optimization program administered by the building commission and any obligations issued pursuant to subd. 3. may not exceed $1,500,000,000.
3. The department may contract appropriation obligations as the department determines is desirable to fund or refund outstanding appropriation obligations issued under this section, to pay issuance or administrative expenses, to make deposits to reserve funds, to pay accrued or funded interest, to pay the costs of credit enhancement, or to make payments under other agreements entered into under sub. (4) (e) .
tment may contract appropriation obligations as the department determines is desirable to fund or refund outstanding appropriation obligations issued under this section, to pay issuance or administrative expenses, to make deposits to reserve funds, to pay accrued or funded interest, to pay the costs of credit enhancement, or to make payments under other agreements entered into under sub. (4) (e) .
(c)
1. Before July 1, 2009, subject to the limitation under subd. 2. , the department may contract appropriation obligations of the state under this section for the purpose of purchasing any of the tobacco settlement revenues that had been sold by the secretary under s. 16.63 .
2. The sum of appropriation obligations issued under this section for the purpose under subd. 1. may not exceed $1,700,000,000, excluding amounts representing original issue discount, unless a higher amount is required by Badger Tobacco Asset Securitization Corporation to defease any outstanding indebtedness secured by such tobacco settlement revenues and to release repurchased tobacco settlement revenues to the state free and clear of any security interest therein. The secretary’s certification as to the amount so required shall be conclusive for all purposes of this section.
(4) Terms.
(a) Money may be borrowed and evidences of appropriation obligation issued therefor pursuant to one or more written authorizing certifications under sub. (5) , unless otherwise provided in the certification, at any time, 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 that the department considers necessary or useful. Appropriation obligations may bear interest at variable or fixed rates, bear no interest, or bear interest payable only at maturity or upon redemption prior to maturity.
(b) The department may authorize evidences of appropriation obligation having any provisions for prepayment considered necessary or useful, including the payment of any premium.
(c) Interest shall cease to accrue on an appropriation obligation on the date that the obligation becomes due for payment if payment is made or duly provided for, but the obligation and accrued interest shall continue to be a binding obligation according to its terms until 6 years overdue for payment, or such longer period as may be required by federal law. At that time, unless demand for its payment has been made, it shall be extinguished and considered no longer outstanding.
(d) All money borrowed by the state pursuant to evidences of appropriation obligation issued under this section shall be lawful money of the United States, and all appropriation obligations shall be payable in such money.
(e) Subject to pars. (h) and (i) , at the time of, or in anticipation of, contracting for the appropriation obligations and at any time thereafter so long as the appropriation obligations are outstanding, the department may enter into agreements and ancillary arrangements relating to the appropriation 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 payments made or received pursuant to any such agreement or ancillary arrangement shall be made from or deposited as provided in the agreement or ancillary arrangement. The determination of the department included in an interest exchange agreement that such agreement relates to an appropriation obligation shall be conclusive.
nt agreements, indexing agreements, or interest exchange agreements. Any payments made or received pursuant to any such agreement or ancillary arrangement shall be made from or deposited as provided in the agreement or ancillary arrangement. The determination of the department included in an interest exchange agreement that such agreement relates to an appropriation obligation shall be conclusive.
(f) All evidences of appropriation obligation owned or held by any state fund are outstanding in all respects and the state agency controlling the fund shall have the same rights with respect to an evidence of appropriation obligation as a private party, but if any sinking fund acquires evidences of appropriation obligation that gave rise to such fund, the obligations are considered paid for all purposes and no longer outstanding and shall be canceled as provided in sub. (8) (e) . All evidences of appropriation obligation owned by any state fund shall be registered to the fullest extent registrable.
(g) The state shall not be generally liable on evidences of appropriation obligation and evidences of appropriation obligation shall not be a debt of the state for any purpose whatsoever. Evidences of appropriation obligation, including the principal thereof and interest thereon, shall be payable only from amounts that the legislature may, from year to year, appropriate for the payment thereof.
(h)
1. Subject to subd. 2. , the terms and conditions of an interest exchange agreement under par. (e) 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. Subd. 1. shall not apply if either of the following occurs:
a. The department receives a determination by the independent financial consulting firm 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 department 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 department’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 exceed original expectations.
ably expected to satisfy subd. 1. , and the joint committee on finance either approves or disapproves, in writing, the department’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 exceed original expectations.
(i) With respect to any interest exchange agreement or agreements specified in par. (e) , all of the following shall apply:
1. The department 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 department included in an interest exchange agreement that such agreement relates to an obligation shall be conclusive.
3. The resolution authorizing the department 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 department 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.
(j) Semiannually, during any year in which the state is a party to an agreement entered into pursuant to par. (e) , the department shall submit a report 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.
(a) Recognizing that the state, by prepaying part or all of the state’s unfunded prior service liability under s. 40.05 (2) (b) and the state’s unfunded liability under s. 40.05 (4) (b) , (bc) , and (bw) and subch. IX of ch. 40 , may reduce its costs and better ensure the timely and full payment of retirement benefits to participants and their beneficiaries under the Wisconsin Retirement System, the legislature finds and determines that it is in the public interest for the state to issue appropriation obligations to obtain proceeds to pay the state’s anticipated unfunded prior service liability under s. 40.05 (2) (b) and to pay part or all of the state’s unfunded prior service liability under s. 40.05 (2) (b) and the state’s unfunded liability under s. 40.05 (4) (b) , (bc) , and (bw) and subch. IX of ch. 40 .
(b) The legislature finds and determines that the purchase of any of the tobacco settlement revenues that had been sold by the secretary under s. 16.63 from the net proceeds of appropriation obligations issued under this section is appropriate and in the public interest and will serve a public purpose.
(2) Definitions. In this section:
(ad) “Aggregate expected debt service and net exchange payments” means the sum of the following:
1. The aggregate net payments expected to be made and received under a specified interest exchange agreement under sub. (4) (e) .
2. The aggregate debt service expected to be made on obligations related to that agreement.
3. The aggregate net payments expected to be made and received under all other interest exchange agreements under sub. (4) (e) relating to those obligations that are in force at the time of executing the agreement.
(am) “Appropriation obligation” means an undertaking by the state to repay a certain amount of borrowed money that is payable from all of the following:
1. Moneys annually appropriated by law for debt service due with respect to such undertaking in that year.
2. Proceeds of the sale of appropriation obligations described in sub. (3) (b) 3.
3. Payments received for that purpose under agreements and ancillary arrangements described in sub. (4) (e) .
4. Investment earnings on amounts in subds. 1. to 3.
(b) “Evidence of appropriation obligation” means a written promise to pay an appropriation obligation.
(c) “Refunding obligation” means an appropriation obligation contracted to fund or refund all or any part of one or more outstanding appropriation obligations.
(d) “Tobacco settlement agreement” has the meaning given in s. 16.63 (1) (b) .
(e) “Tobacco settlement revenues” has the meaning given in s. 16.63 (1) (c) .
(3) Authorization of appropriation obligations.
(a) The department shall have all powers necessary and convenient to carry out its duties, and exercise its authority, under this section.
(b)
1. Subject to the limitation under subd. 2. , the department may contract appropriation obligations of the state under this section for the purpose of paying part or all of the state’s unfunded prior service liability under s. 40.05 (2) (b) and the state’s unfunded liability under s. 40.05 (4) (b) , (bc) , and (bw) and subch. IX of ch. 40 .
2. The sum of appropriation obligations issued under this section for the purpose under subd. 1. , excluding any obligations that have been defeased under a cash optimization program administered by the building commission and any obligations issued pursuant to subd. 3. may not exceed $1,500,000,000.
3. The department may contract appropriation obligations as the department determines is desirable to fund or refund outstanding appropriation obligations issued under this section, to pay issuance or administrative expenses, to make deposits to reserve funds, to pay accrued or funded interest, to pay the costs of credit enhancement, or to make payments under other agreements entered into under sub. (4) (e) .
tment may contract appropriation obligations as the department determines is desirable to fund or refund outstanding appropriation obligations issued under this section, to pay issuance or administrative expenses, to make deposits to reserve funds, to pay accrued or funded interest, to pay the costs of credit enhancement, or to make payments under other agreements entered into under sub. (4) (e) .
(c)
1. Before July 1, 2009, subject to the limitation under subd. 2. , the department may contract appropriation obligations of the state under this section for the purpose of purchasing any of the tobacco settlement revenues that had been sold by the secretary under s. 16.63 .
2. The sum of appropriation obligations issued under this section for the purpose under subd. 1. may not exceed $1,700,000,000, excluding amounts representing original issue discount, unless a higher amount is required by Badger Tobacco Asset Securitization Corporation to defease any outstanding indebtedness secured by such tobacco settlement revenues and to release repurchased tobacco settlement revenues to the state free and clear of any security interest therein. The secretary’s certification as to the amount so required shall be conclusive for all purposes of this section.
(4) Terms.
(a) Money may be borrowed and evidences of appropriation obligation issued therefor pursuant to one or more written authorizing certifications under sub. (5) , unless otherwise provided in the certification, at any time, 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 that the department considers necessary or useful. Appropriation obligations may bear interest at variable or fixed rates, bear no interest, or bear interest payable only at maturity or upon redemption prior to maturity.
(b) The department may authorize evidences of appropriation obligation having any provisions for prepayment considered necessary or useful, including the payment of any premium.
(c) Interest shall cease to accrue on an appropriation obligation on the date that the obligation becomes due for payment if payment is made or duly provided for, but the obligation and accrued interest shall continue to be a binding obligation according to its terms until 6 years overdue for payment, or such longer period as may be required by federal law. At that time, unless demand for its payment has been made, it shall be extinguished and considered no longer outstanding.
(d) All money borrowed by the state pursuant to evidences of appropriation obligation issued under this section shall be lawful money of the United States, and all appropriation obligations shall be payable in such money.
(e) Subject to pars. (h) and (i) , at the time of, or in anticipation of, contracting for the appropriation obligations and at any time thereafter so long as the appropriation obligations are outstanding, the department may enter into agreements and ancillary arrangements relating to the appropriation 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 payments made or received pursuant to any such agreement or ancillary arrangement shall be made from or deposited as provided in the agreement or ancillary arrangement. The determination of the department included in an interest exchange agreement that such agreement relates to an appropriation obligation shall be conclusive.
nt agreements, indexing agreements, or interest exchange agreements. Any payments made or received pursuant to any such agreement or ancillary arrangement shall be made from or deposited as provided in the agreement or ancillary arrangement. The determination of the department included in an interest exchange agreement that such agreement relates to an appropriation obligation shall be conclusive.
(f) All evidences of appropriation obligation owned or held by any state fund are outstanding in all respects and the state agency controlling the fund shall have the same rights with respect to an evidence of appropriation obligation as a private party, but if any sinking fund acquires evidences of appropriation obligation that gave rise to such fund, the obligations are considered paid for all purposes and no longer outstanding and shall be canceled as provided in sub. (8) (e) . All evidences of appropriation obligation owned by any state fund shall be registered to the fullest extent registrable.
(g) The state shall not be generally liable on evidences of appropriation obligation and evidences of appropriation obligation shall not be a debt of the state for any purpose whatsoever. Evidences of appropriation obligation, including the principal thereof and interest thereon, shall be payable only from amounts that the legislature may, from year to year, appropriate for the payment thereof.
(h)
1. Subject to subd. 2. , the terms and conditions of an interest exchange agreement under par. (e) 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. Subd. 1. shall not apply if either of the following occurs:
a. The department receives a determination by the independent financial consulting firm 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 department 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 department’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 exceed original expectations.
ably expected to satisfy subd. 1. , and the joint committee on finance either approves or disapproves, in writing, the department’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 exceed original expectations.
(i) With respect to any interest exchange agreement or agreements specified in par. (e) , all of the following shall apply:
1. The department 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 department included in an interest exchange agreement that such agreement relates to an obligation shall be conclusive.
3. The resolution authorizing the department 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 department 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.
(j) Semiannually, during any year in which the state is a party to an agreement entered into pursuant to par. (e) , the department shall submit a report 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.
Status: in_force · Read it on the official government site
Need a lawyer in Wisconsin?
Find a Wisconsin lawyer
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.