(1)    Investments and loans; separate accounts. The board shall loan or invest moneys belonging to the trust funds as those moneys accumulate in the treasury. The board shall keep a separate account of all investments and loans from each fund.

   (2)   Investments.

      (a)    Authorized investments by board. The board shall manage and invest moneys belonging to the trust funds in good faith and with the care an ordinary prudent person in a like position would exercise under similar circumstances, in accordance with s. 112.11 (3).

      (b)    Manner for holding securities. All bonds, notes, and other instruments of indebtedness and securities purchased under par. (a) shall be held in a manner determined by the board.

      (c)    Contracting with investment board. The board of commissioners of public lands may contract with the investment board to invest part or all of the moneys belonging to the trust funds. If the board of commissioners of public lands contracts with the investment board, the investment board may invest the moneys belonging to the trust funds in accordance with the investment board’s standard of responsibility specified in s. 25.15 (2). All moneys received by the investment board under this paragraph shall be credited to the appropriation account under s. 20.536 (1) (k).

      (cm)    Investments in land in this state. Except as provided under s. 24.09 (1) (bg), the board may not invest moneys in the purchase of any land under par. (a) unless all of the following occur:

         1.    The land is within any applicable consolidation area approved by the board.

         2.    The total acreage of public lands managed by the board does not exceed the total acreage of public lands managed by the board on May 3, 2006.

         3.    The board determines that the purchase of the land will improve timberland management, address forest fragmentation, or increase public access to the land.

         4.    The moneys are in an account specified in s. 24.605.

   (3)   Loans.

      (a)    Authorized loans. The board may loan moneys under its control or belonging to the trust funds to:

         1.    A school district by whatever name designated, to be used for any of the following:

            a.    The operation and maintenance of schools.

            b.    Erecting and remodeling school buildings and teacherages.

            c.    Purchasing teacherages, teacherage sites, schoolhouse sites, bus garage sites, transportation vehicles, bus garages, school equipment and school playgrounds.

            d.    Refunding any indebtedness incurred for a lawful purpose within constitutional limitations.

            e.    The purpose authorized by s. 67.04.

            f.    Any purpose otherwise authorized by law.

         2.    A town, village, city or county as provided under s. 67.04 or otherwise authorized by law.

         3.    A technical college district as provided under s. 67.04 or otherwise authorized by law.

         4.    A public inland lake protection and rehabilitation district for the purposes of the exercise of its powers under s. 33.22.

         5.    A town sanitary district created under s. 60.71 for the purposes for which the district may issue its bonds under s. 60.78.

         6.    A metropolitan sewerage district created under s. 200.05, as provided under s. 67.04 or otherwise authorized by law.

         7.    A metropolitan sewerage system created under s. 200.23, as provided under s. 67.04 or otherwise authorized by law.

         8.    A joint sewerage system created under s. 281.43 (4) for the purpose of exercising its powers under s. 281.43 (4).

         9.    A consortium.

         10.    A cooperative educational service agency representing 2 or more school districts in the area served by the agency for the purpose of conducting a distance education project by the school districts.

         11.    A federated public library system, as provided under s. 43.17 (9) (b) or otherwise authorized by law.

         12.    A drainage district created under ch. 88.

         13.    A local professional baseball park district created under subch. III of ch. 229 for the purpose under s. 229.68 (16) (a).

         14.    A local exposition district created under subch. II of ch. 229 for the purpose of financing acquisition, construction, and equipment costs for sports and entertainment arena facilities, as defined in s. 229.41 (11g).

      (b)    Terms; conditions. A municipality, cooperative educational service agency, drainage district created under ch. 88, local professional baseball park district created under subch. III of ch. 229, or federated public library system may obtain a state trust fund loan for the sum of money, for the time and upon the conditions as may be agreed upon between the board and the borrower, subject to the limitations, restrictions, and conditions set forth in this subchapter.

   (4)   Loan limitations to counties. Notwithstanding sub. (3), the board may not loan moneys to a county unless the governing body of the county demonstrates to the board’s satisfaction that s. 67.045 (1) (a), (b), (c), (d), (e), (f), (g), or (h) applies.

   (4m)   Loans to pay off existing indebtedness. If the board makes a loan to a municipality to pay off existing indebtedness, the making of the loan and the payment of the existing indebtedness shall be treated as if they occur simultaneously.

   (5)   Loans to consortia or cities, villages or towns served by joint library boards. Whenever a consortium applies for a loan under sub. (3), or whenever a group of cities, villages or towns served by a joint county or municipal library board applies for a loan for an educational technology or distance education project, the board shall treat the application as a loan to each of the members of the consortium or each city, village or town served by a county or municipal library board in an amount equal to the total amount of the loan divided equally by the number of members of the consortium or the number of cities, villages and towns served by the library board, unless all members of the consortium or all cities, villages and towns served by a joint library board agree to a different arrangement specified by the members or cities, villages and towns on their applications. The procedure for application, approval and repayment of the loan by each member of a consortium or group under this subsection shall be the same as provided in this subchapter for application, approval and repayment of a loan to that member individually, except that the loan shall not be made unless all members qualify.

   (7)   Loans to cooperative educational service agencies. Whenever a cooperative educational service agency applies for a loan under sub. (3), the board shall treat the application as a loan to each of the school districts on behalf of which the loan is sought in an amount equal to the total amount of the loan divided equally by the number of school districts, unless the cooperative educational service agency specifies on its application a different arrangement that has been agreed to by all school districts for which the loan is sought. The board shall not make the loan unless each school district for which the loan is sought qualifies for a loan in the amount specified in this subsection, or a different amount if that amount is specified on the application. If the cooperative educational service agency fails to make a timely repayment of the principal or payment of the interest on the loan, each school district for which the loan is made is liable to repay the principal and pay the interest in the amount determined under this subsection.