66.0713 Contractor's certificates; general obligation-local improvement bonds; special assessment B bonds.

(1) Definitions. In this section, unless a different meaning clearly appears from the context:

(a) “Contractor" means the person, firm or corporation performing the work or furnishing the materials, or both, for a public improvement.

(am) “Debt service fund" means the fund, however derived, set aside for the payment of principal and interest on contractor's certificates or bonds issued under this section.

(b) “Governing body" means the body or board vested by statute with the power to levy special assessments for public improvements.

(c) “Local governmental unit" means county, city, village, town, farm drainage board, sanitary districts, utility districts, public inland lake protection and rehabilitation districts, and all other public boards, commissions or districts, except 1st class cities, authorized by law to levy special assessments for public improvements against the property benefited by the special improvements.

(d) “Public improvement" means the result of the performance of work or the furnishing of materials or both, for which special assessments are authorized to be levied against the property benefited by the work or materials.

(2) Payment by contractor's certificate.

(a) If a public improvement has been made and has been accepted by the governing body of the local governmental unit, it may issue to the contractor for the public improvement a contractor's certificate as to each parcel of land against which special assessments have been levied for the unpaid balance of the amount chargeable to the parcel, describing each parcel. The certificate shall be substantially in the following form:

$.... No. ....

(name of local governmental unit)

Contractor's certificate

For construction of ....

(name of local governmental unit)

Issued pursuant to

Section 66.0713 (2), Wis. Stats.

We, the undersigned officers of the (name of local governmental unit), certify that (name and address of contractor) has performed the work of constructing .... in .... benefiting the following premises: (insert legal description) in the (name of local governmental unit) .... County, Wisconsin, pursuant to a contract entered into by (name of local governmental unit) with .... (name of contractor), dated ...., and that .... entitled to the sum of .... dollars, the unpaid balance due for the work chargeable to the property described above.

If the unpaid balance due is not paid to the treasurer of (name of local governmental unit) before the first day of the following December, that amount shall be extended upon the tax roll of the (name of local governmental unit) against the property above described as listed in the tax roll, and collected as provided by law.

This certificate is transferable by endorsement but an assignment or transfer by endorsement is invalid unless recorded in the office of the clerk of the (name of local governmental unit) and the fact of the recording is endorsed on this certificate. The holder of this certificate has no claim upon the (Name of local governmental unit), except from the proceeds of the special assessments levied for the work against the above described land.

This certificate shall bear interest from its date to the following January 1.

Given under our hands at (name of local governmental unit), this .... day of ...., .... (year)

.... ....

(Mayor, President, Chairperson)

Countersigned:

.... ....

Clerk, (name of local governmental unit)

Assignment record

Assigned by .... .... (Original Contractor) to .... .... (Name of Assignee) of .... (Address of Assignee) .... .... (Date and signature of clerk)

(b) A contractor's certificate is not a liability of a local governmental unit and shall so state in boldface type printed on the face of the certificate. Upon issuance of a certificate, the clerk of the local governmental unit shall immediately deliver to the treasurer of the local governmental unit a schedule of each certificate showing the date, amount, number, date of maturity, person to whom issued and parcel of land against which the assessment is made. The treasurer shall notify, by mail, the owner of the parcel, as the owner appears on the last assessment roll, that payment is due on the certificate at the office of the treasurer, and if the owner pays the amount due, the clerk shall pay that amount to the registered holder of the certificate, and shall endorse the payment on the face of the certificate and on the clerk's record of the certificate. The clerk shall keep a record of the names of the persons, firms or corporations to whom contractor's certificates are issued and of the assignees of certificates when the assignment is known to the clerk. Assignments of contractor's certificates are invalid unless recorded in the office of the clerk of the local governmental unit and the fact of recording is endorsed on the certificate. Upon final payment of the certificate, the certificate shall be delivered to the treasurer of the local governmental unit and by the treasurer delivered to the clerk. On the first of each month, to and including December 1, the treasurer shall certify to the clerk a detailed statement of all payments made on certificates.

(c) If a contractor's certificate is not paid before December 1 in the year in which issued, the comptroller or clerk of the local governmental unit shall include in the statement of special assessments to be placed in the next tax roll an amount sufficient to pay the certificate, with interest from the date of the certificate to the following January 1, and the proceedings for the collection of that amount shall be the same as the proceedings for the collection of general property taxes, except as otherwise provided in this section. The delinquent taxes shall be returned to the county treasurer in trust for collection and not for credit. All moneys collected by the treasurer of the local governmental unit or by the county treasurer and remitted to the treasurer of the local governmental unit on account of the special assessments shall be delivered to the owner of the contractor's certificate on demand.

(3) General obligation-local improvement bonds. For the purpose of anticipating the collection of special assessments payable in installments as provided in s. 66.0715 (3) and after the installments have been determined, the governing body may issue general obligation-local improvement bonds under s. 67.16.

(4) Special assessment B bonds.

(a) For the purpose of anticipating the collection of special assessments payable in installments, as provided in s. 66.0715 (3) and after the installments have been determined, the governing body may issue special assessment B bonds payable out of the proceeds of the special assessments as provided in this section. The bonds are not a general liability of the local governmental unit.

(b) The issue of special assessment B bonds shall be in an amount not exceeding the aggregate unpaid special assessments levied for the public improvement that the issue is to finance. A separate bond shall be issued for each separate assessment and the bond shall be secured by and be payable out of only the assessment against which it is issued. The bonds shall mature in the same number of installments as the underlying special assessments. The bonds shall carry coupons equal in number to the number of special assessments. The coupons shall be detachable and entitle the owner of the bond to the payment of principal and interest collected on the underlying special assessments. The bond shall be executed as provided in s. 67.08 (1) and may be registered under s. 67.09. Each bond shall include a statement that it is payable only out of the special assessment on the particular property against which it is issued and the purpose for which the assessment was levied and other provisions that the governing body inserts.

(ba) Payments of principal and interest shall conform as nearly as possible to the payments to be made on the installments of the assessment, and the principal and interest to be paid on the bonds shall not exceed the principal and interest to be received on the assessment. All collections of installments of the special assessments levied to pay for the public improvement, either before or after delinquency, shall be placed by the treasurer of the local governmental unit in a special debt service fund designated and identified for the bond issue and shall be used only for the payment of the bonds and interest of the issue. Any surplus in the debt service fund after all bonds and interest are fully paid shall be paid into the general fund.

(c) Special assessment B bonds shall be registered in the name of the owner on the records of the clerk of the local governmental unit that issued the bonds. Upon transfer of the ownership of the bonds the transfer shall be noted upon the bond and on the record of the clerk of the local governmental unit. Any transfer not so recorded is void and the clerk of the local governmental unit may make payments of principal and interest to the owner of the bond as registered on the books of the local governmental unit.

(d) Principal and interest collected on the underlying special assessments and interest collected on the delinquent special assessments and on delinquent tax certificates issued for the delinquent assessments shall be paid by the treasurer of the local governmental unit out of the debt service fund created for the issue of the bonds to the registered holder of the bonds upon the presentation and surrender of the coupons due attached to the bonds. If any installment of the special assessment entered in the tax roll is not paid to the treasurer of the local governmental unit with the other taxes, it shall be returned to the county treasurer as delinquent in trust for collection.

(e) If the tax certificate resulting from the delinquent special assessment is redeemed by any person other than the county, the county treasurer shall pay to the local governmental unit the full amount received for the tax certificate, including interest, and the treasurer of the local governmental unit shall then pay the amount of the remittance into a special debt service fund created for the payment of the special assessment B bonds.

(5) Area-grouped special assessment B bonds.

(a) If the governing body determines to issue special assessment B bonds under sub. (4), it may group the special assessments levied against benefited lands and issue of the bonds against the special assessments grouped as a whole. All of the bonds shall be equally secured by the assessments without priority one over the other.

(b) All of the following apply to area-grouped special assessment B bonds issued under this section:

1. For the purpose of anticipating the collection of special assessments payable in installments under this section and after the installments have been determined, the governing body may issue area-grouped special assessment B bonds payable out of the proceeds of the special assessments as provided under sub. (4). The bonds are not a general liability of the local governmental unit.

2. The issue of the bonds shall be in an amount not exceeding the aggregate unpaid special assessments levied for the public improvement or projects which the issue is to finance. The bonds shall mature over substantially the same period of time in which the special assessment installments are to be paid. The bonds shall be bearer bonds or may be registered bonds under s. 67.09. The bonds shall be executed as provided in s. 67.08 (1) and shall include a statement that they are payable only from the special debt service fund provided for in subd. 4. and a fund created under sub. (7) for the collection and payment of the special assessment and any other provisions that the governing body deems proper to insert.

4. All collections of principal and interest on the underlying special assessments and installments, either before or after delinquency and after issuance of a tax certificate under s. 74.57, shall be placed by the treasurer of the local governmental unit in a special debt service fund created, designated and identified for the issue of the bonds and used only for payment of the bonds and interest on the bonds to the holders of the bonds or coupons in accordance with the terms of the issue. Any surplus in the debt service fund, after all bonds and interest on the bonds are fully paid, shall be paid into the general fund.

5. If the tax certificate is redeemed by any person other than the county, the county treasurer shall pay to the local governmental unit the full amount received for the certificate, including interest, and the treasurer of the local governmental unit shall pay the amount of the remittance into the special debt service fund created for the payment of the bonds.

7. A holder of the bonds or of any coupons attached to the bonds has a lien against the special debt service fund created under subd. 4. for payment of the bonds and interest on the bonds and against any reserve fund created under sub. (7) and may either at law or in equity protect and enforce the lien and compel performance of all duties required by this section of the local governmental unit issuing the bonds.

(6) Refunding B bonds. A local governmental unit may issue refunding B bonds to refund any outstanding special assessment B bonds issued under sub. (4) or (5). The refunding B bonds shall be secured by and payable only from the special assessments levied to pay for the public improvements financed by the bonds to be refunded, and are not a general liability of the local governmental unit. If bonds issued under sub. (4) are to be refunded, the provisions of sub. (4) (b) to (e) apply to the refunding B bonds; if bonds issued under sub. (5) are to be refunded, the provisions of sub. (5) (b) apply to the refunding B bonds. If the governing body determines that it is necessary to amend the prior assessments in connection with the issuance of refunding B bonds under this section, it may reconsider and reopen the assessments under s. 66.0703 (10). The notice and hearing under s. 66.0703 (10) may be waived under s. 66.0703 (7) (b) by the owners of the property affected. If the assessments are amended, the refunding B bonds shall be secured by and payable from the special assessments as amended. If the assessments are amended, all direct and indirect costs reasonably attributable to the refunding of the bonds may be included in the cost of the public improvements being financed. If the governing body determines to issue refunding B bonds, it may create a reserve fund for the issue under sub. (7).

(7) Reserve fund for special assessment B bonds and refunding B bonds. If the governing body determines to issue special assessment B bonds under sub. (4) or refunding B bonds under sub. (6), it may establish in its treasury a fund to be designated as a reserve fund for the particular bond issue, to be maintained until the obligation is paid or otherwise extinguished. Any surplus in the reserve fund after all the bonds have been paid or canceled shall be carried into the general fund of the local governmental unit's treasury. The source of the fund shall be established either from proceeds of the bonds, the general fund of the local governmental unit's treasury or by the levy of an irrepealable and irrevocable general tax. The bonds are not a general liability of the local governmental unit.

(8) Payment of B bonds from tax levy. Any local governmental unit authorized to issue special assessment B bonds, in addition to the special assessments or bond proceeds or other sources, may appropriate funds out of its annual tax levy for the payment of the bonds. The payment of the bonds out of funds from a tax levy may not be construed as constituting an obligation of the local governmental unit to make any other such appropriation.

(9) Payment by local governmental unit. If a public improvement has been paid for by the local governmental unit, contractor's certificates under sub. (2), general obligation-local improvement bonds under s. 67.16, or special assessment B bonds under sub. (4) may be issued to the local governmental unit as the owner of the certificates or bonds. All of the provisions of subs. (2) and (4) and s. 67.16 applicable to the contractor or to the owner of the contractor's certificates, the general obligation-local improvement bonds or the special assessment B bonds shall be deemed to include the local governmental unit which has paid for the improvement and to which the contractor's certificates, general obligation-local improvement bonds or special assessment B bonds have been issued, except as otherwise provided in this section.

(10) Legality of proceedings; conclusive evidence. After the expiration of 90 days from the date of a contractor's certificate or special assessment B bond, the certificate or bond is conclusive evidence of the legality of all proceedings up to and including the issue of the certificate or bond and prima facie evidence of the proper construction of the improvement.

History: 1973 c. 172; 1977 c. 29 s. 1646 (3); 1977 c. 391; 1979 c. 110 s. 60 (13); 1981 c. 390 s. 252; 1983 a. 24; 1983 a. 189 ss. 66, 329 (14); 1983 a. 192; 1983 a. 207 ss. 32, 33, 93 (8); 1987 a. 197, 378, 403; 1991 a. 237, 316; 1993 a. 184; 1997 a. 250; 1999 a. 150 ss. 203, 502, 503, 509 to 513, 516, 517, 519, 522, 523; Stats. 1999 s. 66.0713; 2005 a. 253.