HF 2541

as introduced - 87th Legislature (2011 - 2012) Posted on 02/27/2012 01:11pm

A bill for an act
relating to economic development; providing for a new privately owned National
Football League stadium in Minnesota; authorizing the issuance of revenue
bonds; phasing out statewide business property tax; amending Minnesota Statutes
2010, sections 275.025, subdivision 1; 297A.71, by adding a subdivision;
Minnesota Statutes 2011 Supplement, section 340A.404, subdivision 1;
proposing coding for new law in Minnesota Statutes, chapter 116J; repealing
Minnesota Statutes 2010, section 275.025, subdivisions 2, 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

FACILITATING FINANCING OF THE CONSTRUCTION OF A NEW
STADIUM FOR THE MINNESOTA VIKINGS

Section 1.

new text begin [116J.6911] PURPOSE.
new text end

new text begin The purpose of this act is to assist the Minnesota Vikings in securing financing to
build a privately owned, privately operated stadium as a venue for professional football.
This assistance includes: (1) issuing revenue bonds secured by and to be repaid with
revenues generated by user fees associated with attending games and events at the stadium,
and (2) providing incentives for businesses to make contributions toward the expenses of
constructing a stadium through reductions to the state general levy property tax and by
exempting construction materials used in construction of a stadium from sales taxes. This
assistance is provided in exchange for an agreement with the Minnesota Vikings that the
stadium will be located in Minnesota, that the team will repay the financing, and will play
all home games in the stadium until the bonds are repaid.
new text end

new text begin new text end

Sec. 2.

new text begin [116J.6912] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioner. new text end

new text begin Unless otherwise specified, "commissioner" in
sections 116J.6911 to 116J.699 means the commissioner of management and budget.
new text end

new text begin Subd. 2. new text end

new text begin Public infrastructure. new text end

new text begin "Public infrastructure" means all property,
facilities, and improvements determined by the state to facilitate the development and use
of the stadium, including, but not limited to, property and improvements for drainage,
parking, roadways, walkways, skyways, pedestrian bridges, bicycle paths, lighting,
landscaping, utilities, streets, streetscapes, and transit improvements to facilitate public
access to the stadium.
new text end

new text begin Subd. 3. new text end

new text begin Stadium. new text end

new text begin "Stadium" means a facility suitable for National Football League
games constructed or renovated under this act.
new text end

new text begin Subd. 4. new text end

new text begin Streetscape. new text end

new text begin "Streetscape" means improvements to streets and sidewalks
or other public rights-of-way for the purpose of enhancing the movement, safety,
convenience, or enjoyment of stadium patrons and other pedestrians, including decorative
lighting and surfaces, plantings, display and exhibit space, adornments, seating, and transit
and bus shelters, which are designated as streetscape by the state.
new text end

new text begin Subd. 5. new text end

new text begin Team. new text end

new text begin "Team" means the owner and operator of the football team currently
known as the Minnesota Vikings or any team owned and operated by a person who
purchases or otherwise takes ownership or control of or reconstitutes a National Football
League team in Minnesota.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [116J.694] STADIUM USER FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Fee imposed. new text end

new text begin A fee is imposed on the sale or licensing of the
following, sold in the state or online, at the rate of ten percent:
new text end

new text begin (1) a ticket to attend a game or event in the stadium;
new text end

new text begin (2) concessions sold at the stadium;
new text end

new text begin (3) any licenses or fees charged by the team or league to reserve seats, boxes,
suites or spaces including personal seat licenses, luxury box fees, club seating fees,
seat/suite/box maintenance fees, memberships, or the like in the stadium;
new text end

new text begin (4) sponsorships, including, but not limited to, naming rights for the stadium or
parts of the stadium;
new text end

new text begin (5) signage in or on the stadium;
new text end

new text begin (6) charges for parking within one-half mile of the stadium on days that Minnesota
Vikings games are played at the stadium;
new text end

new text begin (7) the team's share of television and media revenue; and
new text end

new text begin (8) stadium rental fees.
new text end

new text begin Subd. 2. new text end

new text begin Compensating use fee. new text end

new text begin If the fee is not paid under subdivision 1, a
compensating fee is imposed on the possession for the sale or use of items used in
subdivision 1, clauses (1), (3) to (6), and (8). The rate of the fee equals the rate in
subdivision 1 and must be paid by the possessor or beneficiary of the item.
new text end

new text begin Subd. 3. new text end

new text begin Payment; annual return. new text end

new text begin The Minnesota Vikings, other vendors of
products subject to a fee under subdivision 1, or possessors of items subject to a user
fee under subdivision 2, must remit the fees to the state at the same time and in the
same manner as provided for payment of tax under chapter 289A. Revenue from the fee
imposed by this chapter must be remitted to the commissioner of revenue in a form and
manner prescribed by the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin The audit, assessment, interest, appeal, refund, penalty,
enforcement, administrative, and collection provisions of chapters 270C and 297A, apply
to the fees imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner of revenue shall deposit the
revenues from the fees under this section in the state treasury and credit them to a special
stadium revenue account dedicated to making debt service payments for bonds issued
under this section.
new text end

new text begin Subd. 6. new text end

new text begin Use of fees. new text end

new text begin Revenues received from the fees imposed under this section
must be used to pay, reimburse, or secure the payment of any principal of premium, or
interest on bonds issued in accordance with this act. If the revenues received from the user
fees of this section exceed the amount necessary for this purpose, remaining revenue shall
be deposited in the state treasury in the special stadium debt service reserve account. If the
special stadium debt service reserve account is fully funded, the remaining revenue shall
be applied toward payoff of the bonds issued under this act.
new text end

new text begin Subd. 7. new text end

new text begin Sunset. new text end

new text begin This section expires when the bonds authorized under section
116J.699 have been repaid, as determined by the commissioner.
new text end

Sec. 4.

new text begin [116J.695] LOCAL SALES TAXES.
new text end

new text begin No local sales or use tax may be imposed on sales at the stadium site, except a
general sales tax permitted under section 297A.99.
new text end

Sec. 5.

new text begin [116J.696] CITY REQUIREMENTS.
new text end

new text begin The city in which the stadium is constructed or located shall issue intoxicating liquor
licenses that are reasonably requested for the premises of the stadium. These licenses
are in addition to the number authorized by law. All provisions of chapter 340A not
inconsistent with this section apply to the licenses authorized under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

new text begin [116J.697] CRITERIA AND CONDITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Stadium location. new text end

new text begin The stadium must be located in the state of
Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Continued use. new text end

new text begin All home games of the team must be played in the stadium
for a period of 30 years, or until all bonds issued under this act are repaid, whichever
is longer.
new text end

new text begin Subd. 3. new text end

new text begin Access to books and records. new text end

new text begin The team must provide access to the
commissioner of management and budget to annual audited financial statements of the
team and other financial books and records that the commissioner deems necessary to
determine compliance by the team with this act and to enforce the terms of any agreements
entered into under this act. Any financial information obtained by the commissioner under
this subdivision is nonpublic data under section 13.02, subdivision 9.
new text end

new text begin Subd. 4. new text end

new text begin No strikes; lockouts. new text end

new text begin The commissioner must negotiate a public sector
project labor agreement or other agreement to prevent strikes and lockouts that would halt,
delay, or impede construction of the stadium and related facilities and public infrastructure.
new text end

new text begin Subd. 5. new text end

new text begin Name retention. new text end

new text begin In the event of any dissolution or relocation of the Vikings
franchise, the team must cease use of the name, logo, and colors of the Minnesota Vikings
and must transfer to the state of Minnesota the Minnesota Vikings heritage and records,
including the name, logo, colors, history, playing records, trophies, and memorabilia.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

new text begin [116J.698] APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation for stadium construction. new text end

new text begin $300,000,000 is
appropriated from the special stadium revenue bond proceeds account to the team for
construction of a stadium suitable for professional football games. This appropriation is
contingent upon execution of an agreement between the state and the team memorializing
the team's obligations, consistent with this act and other terms as decided during
negotiations. This appropriation is not available until the commissioner of management
and budget determines that an amount sufficient to construct and equip the stadium is
available from nonstate sources and that all other criteria and conditions specified in this
act have been met.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation for infrastructure. new text end

new text begin $........ is appropriated from the
general fund for public infrastructure.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

new text begin [116J.699] BOND SALE.
new text end

new text begin Subdivision 1. new text end

new text begin Bonding authority. new text end

new text begin The commissioner of management and budget
shall sell and issue state taxable revenue bonds in the amount up to $300,000,000, for
the following purposes:
new text end

new text begin (1) to provide the money appropriated in this act;
new text end

new text begin (2) to pay the costs of issuance, debt service, and bond insurance or other credit
enhancements, and to fund reserves; and
new text end

new text begin (3) to refund bonds issued under this section.
new text end

new text begin Subd. 2. new text end

new text begin Procedure; certain costs of issuance. new text end

new text begin (a) The commissioner may sell and
issue the bonds on the terms and conditions the commissioner determines to be in the best
interest of the state. The bonds may be sold at public or private sale. The commissioner
may enter into any agreements or pledges the commissioner determines necessary or
useful to sell the bonds that are not inconsistent with sections 403.21 to 403.40. Sections
16A.672 to 16A.675, apply to the bonds. Except for amounts appropriated to pay the costs
of investment banking and banking services under section 16A.647, the proceeds of the
bonds issued under this section must be credited to a special stadium bond proceeds
account in the state treasury.
new text end

new text begin (b) Before the proceeds are received in the special stadium bond proceeds account,
the commissioner of management and budget may transfer to the account from the special
stadium debt service reserve account amounts not exceeding the expected proceeds from
the next bond sale. The commissioner of management and budget shall return these
amounts to the special stadium debt service account by transferring proceeds when
received. The amounts of these transfers are appropriated from the special stadium debt
service reserve account and from the stadium revenue bond proceeds account.
new text end

new text begin Subd. 3. new text end

new text begin Revenue sources. new text end

new text begin The debt service on the bonds is payable only from the
following sources:
new text end

new text begin (1) revenue credited to the special stadium revenue account from the fees imposed
and collected under this act, or from any other source; and
new text end

new text begin (2) other revenues pledged to the payment of the bonds.
new text end

new text begin Subd. 4. new text end

new text begin Refunding bonds. new text end

new text begin The commissioner may issue bonds to refund
outstanding bonds issued under subdivision 1, including the payment of any redemption
premiums on the bonds and any interest accrued or to accrue to the first redemption date
after delivery of the refunding bonds. The proceeds of the refunding bonds may, in the
discretion of the commissioner, be applied to the purchases or payment at maturity of the
bonds to be refunded, or the redemption of the outstanding bonds on the first redemption
date after delivery of the refunding bonds and may, until so used, be placed in escrow to
be applied to the purchase, retirement, or redemption. Refunding bonds issued under this
subdivision must be issued and secured in the manner provided by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Not a general obligation. new text end

new text begin Bonds issued under this section are not public
debt and are not to be backed by the full faith and credit of the state. Debt service
payments on bonds issued under this section will be made from the special stadium
revenue fund. The state will, however, maintain a special stadium debt service reserve
account having a balance equal to the annual debt service payment owed on these bonds.
The special stadium debt service reserve account will be funded by contributions from
private parties and from revenues as provided in section 116J.694. If the special stadium
revenue fund has a shortfall in any year, the commissioner may request appropriation from
the special stadium debt service reserve account to cover the shortfall.
new text end

new text begin Subd. 6. new text end

new text begin Public purpose. new text end

new text begin The legislature finds and declares the state's role in
issuing revenue bonds and making debt service payments under this act are for a necessary
and public purpose by adding value to the culture of the state; providing a valuable
recreational opportunity for residents to feel connected to and take pride in a professional
team bearing the name of the state; and providing the state visibility and a prestigious
marker to those outside of the state and thereby serves as a marketing vehicle for tourism
in the state and for recruitment of employees.
new text end

new text begin Subd. 7. new text end

new text begin Specific performance of contractual obligations to play home games in
stadium. new text end

new text begin The legislature finds and declares that any provision in any statute, local law, or
agreement with a professional football team or league that requires the team to play all
of its home games in the stadium constructed using funds appropriated under this act for
a period of 30 years or until the bonds have been repaid, whichever is longer, serves a
unique public purpose for which the remedies of specific performance and injunctive relief
are essential to its enforcement and to obtaining the benefits of the state's consideration.
The legislature further finds and declares that government assistance to facilitate the
presence of professional football provides to the state of Minnesota, its residents, and its
businesses highly valued, intangible benefits that are virtually impossible to quantify and,
therefore, not recoverable even if the government receives monetary damages in the event
of a team's breach of contract. Minnesota courts are, therefore, charged with protecting
those benefits through the use of specific performance and injunctive relief as provided in
this chapter and in any agreements.
new text end

new text begin Subd. 8. new text end

new text begin Trustee. new text end

new text begin The commissioner may contract with and appoint a trustee for
bondholders. The trustee has the powers and authority vested in it by the commissioner
under the bond and trust indentures.
new text end

new text begin Subd. 9. new text end

new text begin Pledges. new text end

new text begin Any pledge made by the commissioner is valid and binding
from the time the pledge is made. The money or property pledged and later received by
the commissioner is immediately subject to the lien of the pledge without any physical
delivery of the property or money or further act, and the lien of any pledge is valid and
binding as against all parties having claims of any kind in tort, contract, or otherwise
against the commissioner, whether or not those parties have notice of the lien or pledge.
Neither the order nor any other instrument by which a pledge is created need be recorded.
new text end

new text begin Subd. 10. new text end

new text begin Bonds; purchase and cancellation. new text end

new text begin The commissioner, subject to
agreements with bondholders that may then exist, may, out of any money available for the
purpose, purchase bonds of the commissioner at a price not exceeding: (1) if the bonds are
then redeemable, the redemption price then applicable plus accrued interest to the next
interest payment date thereon; or (2) if the bonds are not redeemable, the redemption price
applicable on the first date after the purchase, upon which the bonds become subject to
redemption plus accrued interest to that date.
new text end

new text begin Subd. 11. new text end

new text begin State pledge against impairment of contracts. new text end

new text begin The state pledges and
agrees with the holders of any bonds that the state will not limit or alter the rights vested in
the commissioner to fulfill the terms of any agreements made with the bondholders, or
in any way impair the rights and remedies of the holders until the bonds, together with
interest on them, with interest on any unpaid installments of interest, and all costs and
expenses in connection with any action or proceeding by or on behalf of the bondholders,
are fully met and discharged. The commissioner may include this pledge and agreement
of the state in any agreement with the holders of bonds issued under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2010, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 43. new text end

new text begin Building materials; exemption. new text end

new text begin Materials and supplies used or
consumed in, and equipment incorporated into, the construction or improvement of
the stadium and public infrastructure constructed pursuant to this act are exempt. This
subdivision expires one year after the date that the first professional football game is
played in the stadium and applies to materials, supplies, and equipment used in the
stadium, and five years after the issuance of the first bonds under this act for materials,
supplies, and equipment used in the public infrastructure.
new text end

Sec. 10.

Minnesota Statutes 2011 Supplement, section 340A.404, subdivision 1,
is amended to read:

Subdivision 1.

Cities.

(a) A city may issue an on-sale intoxicating liquor license to
the following establishments located within its jurisdiction:

(1) hotels;

(2) restaurants;

(3) bowling centers;

(4) clubs or congressionally chartered veterans organizations with the approval of
the commissioner, provided that the organization has been in existence for at least three
years and liquor sales will only be to members and bona fide guests, except that a club
may permit the general public to participate in a wine tasting conducted at the club under
section 340A.419;

new text begin (5) sports facilities hosting National Football League games;
new text end

deleted text begin (5) deleted text end new text begin (6) new text end sports facilities located on land owned by the Metropolitan Sports
Commission; and

deleted text begin (6) deleted text end new text begin (7) new text end exclusive liquor stores.

(b) A city may issue an on-sale intoxicating liquor license, an on-sale wine license,
or an on-sale malt liquor license to a theater within the city, notwithstanding any law, local
ordinance, or charter provision. A license issued under this paragraph authorizes sales on
all days of the week to persons attending events at the theater.

(c) A city may issue an on-sale intoxicating liquor license, an on-sale wine license,
or an on-sale malt liquor license to a convention center within the city, notwithstanding
any law, local ordinance, or charter provision. A license issued under this paragraph
authorizes sales on all days of the week to persons attending events at the convention
center. This paragraph does not apply to convention centers located in the seven-county
metropolitan area.

(d) A city may issue an on-sale wine license and an on-sale malt liquor license to
a person who is the owner of a summer collegiate league baseball team, or to a person
holding a concessions or management contract with the owner, for beverage sales at a
ballpark or stadium located within the city for the purposes of summer collegiate league
baseball games at the ballpark or stadium, notwithstanding any law, local ordinance, or
charter provision. A license issued under this paragraph authorizes sales on all days of the
week to persons attending baseball games at the ballpark or stadium.

ARTICLE 2

STATEWIDE LEVY

Section 1. new text begin PURPOSE.
new text end

new text begin The purpose of this article is to provide an incentive through property tax relief to
Minnesota businesses to contribute to a fund for construction of a Vikings stadium and for
repayment of bonds issued under this act.
new text end

Sec. 2.

Minnesota Statutes 2010, section 275.025, subdivision 1, is amended to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy base amount is $592,000,000 for taxes payable
in 2002. For taxes payable in subsequent years new text begin before 2014 new text end , the levy base amount is
increased each year by multiplying the levy base amount for the prior year by the sum
of one plus the rate of increase, if any, in the implicit price deflator for government
consumption expenditures and gross investment for state and local governments prepared
by the Bureau of Economic Analysts of the United States Department of Commerce for
the 12-month period ending March 31 of the year prior to the year the taxes are payable.
The tax under this section is not treated as a local tax rate under section 469.177 and is not
the levy of a governmental unit under chapters 276A and 473F.

new text begin The state general levy base is $42,000,000 for seasonal residential recreational
property for taxes payable in 2014 and thereafter. The state general levy base is
$717,300,000 for commercial-industrial property for taxes payable in 2014; $637,600,000
for taxes payable in 2015; $557,900,000 for taxes payable in 2016; $478,200,000 for taxes
payable in 2017; $398,500,000 for taxes payable in 2018; $318,800,000 for taxes payable
in 2019; $239,100,000 for taxes payable in 2020; $159,400,000 for taxes payable in 2021;
and $79,700,000 for taxes payable in 2022.
new text end

The commissioner shall increase or decrease the preliminary or final rate for a year
as necessary to account for errors and tax base changes that affected a preliminary or final
rate for either of the two preceding years. Adjustments are allowed to the extent that the
necessary information is available to the commissioner at the time the rates for a year must
be certified, and for the following reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of assessment submitted under
section 270C.89 for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2013, payable in
2014 and thereafter.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 275.025, subdivisions 2 and 4, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2022, payable in
2023 and thereafter.
new text end