WHEFA, created by the Legislature in 1973 (Chapter 231, Wisconsin Statutes), has been providing active capital financing assistance to Wisconsin nonprofit health care institutions since 1979. Over the years, the Wisconsin legislature has expanded the types of nonprofit entities eligible for WHEFA financing assistance from just hospitals and other health care entities, to also include independent colleges and universities, certain continuing care facilities, private elementary and secondary schools, research facilities, and community rehabilitation providers. In July 2013, WHEFA’s charter was permanently expanded to permit all Wisconsin 501(c)(3) nonprofit organizations access to WHEFA’s low-cost capital financing.
Funds for each project financed by WHEFA are obtained through the sale of revenue bonds of WHEFA. Bonds are sold to institutional lenders in “direct placement” transactions and to individual and institutional investors in “public offerings”. Bond sale proceeds are loaned by WHEFA to the borrowing institution or project sponsor. No state or other public funds are used.
WHEFA’s bonds are payable solely out of loan repayments from the borrowing institution, sponsor or guarantor. They are not a debt, liability, or “moral” obligation of the State of Wisconsin or any of its political subdivisions. WHEFA has no taxing power.
The credit supporting any WHEFA bond issue is the credit of the borrowing institution involved. The availability of financing and its terms and conditions depends in each case upon the credit-worthiness of each borrower. Interest paid on WHEFA bonds is exempt from federal income taxation, resulting in materially lower financing costs to the borrowing institution. Interest on bonds issued by WHEFA is exempt from present Wisconsin income taxation on certain bonds.
42 Years of WHEFA History
- 1979 Wisconsin Health Facilities Authority (WHFA) completed its first bond issue
- 1987 WHFA statute was expanded to include the ability to finance private colleges / universities and continuing care facilities
- 2004 WHEFA statute expanded to include the ability to finance private, nonprofit elementary or secondary educational institutions (K-12)
- 2009 WHEFA statute expanded to include the ability to finance private nonprofit research facilities
- 2009 Legislative change authorizes a state tax-exemption on healthcare IT project financings by WHEFA
- 2013 WHEFA statute expanded to include the ability to finance all nonprofit institutions
- 2013 WHEFA statute expanded to allow interest income on bonds issued by WHEFA to be exempt from State income tax if such an exemption is already available on bonds eligible to be issued for the same purpose through another Wisconsin conduit issuer
- 2019 WHEFA statute expanded to allow interest income on bonds issued by WHEFA after July 3, 2019 totaling $35 million or less to be exempt from State income tax.