1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to metropolitan government; providing for the 1.3 financing, organization, and ownership of certain 1.4 athletic organizations; providing conditions for the 1.5 use of certain facilities; permitting the issuance of 1.6 bonds; appropriating money; proposing coding for new 1.7 law as Minnesota Statutes, chapter 473I. 1.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9 Section 1. [473I.01] [DEFINITIONS.] 1.10 Subdivision 1. [TERMS.] For the purpose of sections 1.11 473I.01 to 473I.08, the following terms have the meanings given 1.12 in this section. 1.13 Subd. 2. [AMATEUR SPORTS COMMISSION.] "Amateur sports 1.14 commission" means the Minnesota amateur sports commission, 1.15 established in chapter 240A. 1.16 Subd. 3. [BASKETBALL AND HOCKEY ARENA.] "Basketball and 1.17 hockey arena" means the indoor arena building currently occupied 1.18 and utilized for the playing of major league basketball, hockey, 1.19 and other purposes, including all its improvements and other 1.20 appurtenances, located in the city and owned by the Minneapolis 1.21 community development agency. 1.22 Subd. 4. [CITY.] "City" means the city of Minneapolis. 1.23 Subd. 5. [COMMISSION.] "Commission" means the metropolitan 1.24 sports facilities commission, established in sections 473.551 to 1.25 473.599. 1.26 Subd. 6. [COUNCIL.] "Council" means the metropolitan 2.1 council established in sections 473.121 to 473.249. 2.2 Subd. 7. [NHL TEAM.] "NHL team" means the legal entity 2.3 which owns and operates a major league professional hockey team 2.4 sanctioned by the National Hockey League or any successor 2.5 organization which issues major league professional hockey 2.6 franchises and governs the operation of the major league 2.7 professional hockey league. 2.8 Sec. 2. [473I.02] [LEGISLATIVE POLICY; PURPOSE.] 2.9 The legislature finds and determines that: 2.10 (a) Obtaining and securing the location of professional 2.11 major league athletic teams in the state and within the 2.12 metropolitan area and the enhancement of opportunities for the 2.13 promotion of amateur sports activities in the state and within 2.14 the metropolitan area has and will provide significant economic 2.15 development, attract and secure additional employment, maintain 2.16 and enhance the tax base upon which the state and its political 2.17 subdivisions depend for the financing of other governmental 2.18 functions, and provide important social, entertainment, 2.19 recreational, and tourism opportunities for the state and its 2.20 citizens. 2.21 (b) The council and the commission, in providing for the 2.22 construction and ownership of the Hubert H. Humphrey Metrodome, 2.23 have and will serve and achieve the foregoing public purposes by 2.24 promoting major league baseball and football games in the state 2.25 and within the metropolitan area. 2.26 (c) The city and the Minneapolis community development 2.27 agency in the purchase and ownership of the basketball and 2.28 hockey arena, have and will serve and achieve the foregoing 2.29 purposes by securing, permitting, and providing for the playing 2.30 of professional major league basketball in the state and within 2.31 the metropolitan area and, as supported by appropriations, will 2.32 provide for increased opportunities for amateur sports 2.33 activities in the state and within the metropolitan area. 2.34 (d) The attraction of a NHL team to the state and within 2.35 the metropolitan area, by reasonable methods that the commission 2.36 may devise to further secure and promote these public purposes, 3.1 will locate in the state all of the nation's four major league 3.2 professional sports, will further serve and achieve the 3.3 foregoing purposes, and will increase and enhance the value and 3.4 public benefits afforded to the state and its citizens by the 3.5 public's investment in the basketball and hockey arena and by 3.6 the public's assurance of a long-term commitment by a NHL team 3.7 to remain in the state. 3.8 (e) The citizens of the state both within and outside of 3.9 the metropolitan area need additional facilities which will 3.10 provide increased opportunities for athletic ice sports and 3.11 activities and serve as a community resource by permitting and 3.12 promoting the conduct of other year-round social, recreational, 3.13 business, and entertainment activities. 3.14 (f) The expansion of the ice athletic facilities of the 3.15 University of Minnesota will provide increased opportunities for 3.16 its students and will supplement the ability of the state to 3.17 attract and assure the presence of a NHL team in the state and 3.18 within the metropolitan area and serve the foregoing public 3.19 purposes. 3.20 It is therefore necessary for the public health, safety, 3.21 and general welfare to aid in the financing of the construction 3.22 and renovation of public ice athletic facilities and arenas 3.23 throughout the state including the expansion of public ice 3.24 athletic facilities of the University of Minnesota and to 3.25 attract and secure the long-term commitment of a NHL team to the 3.26 basketball and hockey arena, by authorizing financing and other 3.27 arrangements as necessary to accomplish that purpose. 3.28 Sec. 3. [473I.03] [COMMISSION AND COUNCIL POWERS.] 3.29 Subdivision 1. [COMMISSION.] In addition to the commission 3.30 powers provided under sections 473.551 to 473.599, the 3.31 commission may enter into agreements or provide for financial or 3.32 economic incentives or make other arrangements sufficient to 3.33 attract a NHL team to the metropolitan area and to assure a 3.34 long-term commitment of a NHL team to play its home games at the 3.35 basketball and hockey arena. In consideration of that 3.36 commitment by a NHL team and other commitments and assurances as 4.1 may be deemed necessary or reasonable by the commission to 4.2 protect the public interest, the commission, by way of 4.3 illustration and not as limitations of the foregoing powers may: 4.4 (a) condition its financial or economic incentives or 4.5 arrangements upon obtaining an option to purchase the NHL team, 4.6 or obtaining covenants assuring a long-term commitment by way of 4.7 specific performance or other equitable remedies, or obtaining a 4.8 security interest in the NHL team or in any of its assets, 4.9 assuring the payment of liquidated damages upon the breach of a 4.10 NHL's team's commitments, or other contractual rights or 4.11 remedies; 4.12 (b) make grants or loans, on terms as the commission 4.13 determines; 4.14 (c) acquire an interest in a NHL team; 4.15 (d) acquire an interest in the basketball and hockey arena 4.16 or pay all or a part of the costs of operation or improvement of 4.17 the basketball and hockey arena or pay all or a part of the 4.18 taxes on it; 4.19 (e) take other actions as necessary or convenient to 4.20 attract a NHL team to the metropolitan area and assure the 4.21 long-term commitment by the NHL team; 4.22 (f) be a limited partner in a partnership, a shareholder in 4.23 a corporation, a member of a limited liability company or a 4.24 partner in a limited liability partnership, for the purposes 4.25 provided in this chapter; 4.26 (g) sell or syndicate the commission's interest in a NHL 4.27 team, if any, through a private or public offering; 4.28 (h) form an affiliated legal entity, including but not 4.29 limited to a corporation, nonprofit corporation, limited or 4.30 general partnership, limited liability company or limited 4.31 liability partnership, which may exercise separately or together 4.32 with the commission, any part or all of the powers of the 4.33 commission provided in this section; and 4.34 (i) take all of the foregoing actions by itself or in 4.35 concert with the Minneapolis community development agency, city 4.36 or council, each of which for those purposes shall have the 5.1 powers provided by this chapter to the commission, or in concert 5.2 with other appropriate political subdivisions of the state to 5.3 the extent they are otherwise authorized by law. 5.4 Subd. 2. [COUNCIL.] The council shall receive the 5.5 appropriations under section 473I.07, and, subject to section 5.6 473I.04, subdivision 3, paragraph (d), pledge those funds to the 5.7 payment of bonds issued by the council under section 473I.04, 5.8 or, to the extent not required for those payments or if bonds 5.9 are not issued, shall transfer the amounts to the commission for 5.10 the purposes provided in subdivision 1. The council may issue 5.11 revenue bonds as provided in section 473I.04, and shall pay the 5.12 net proceeds to the commission for the purposes provided in 5.13 subdivision 1. The council shall have no obligation or 5.14 authority to see to the use or application of the payments by 5.15 the commission, except as provided in section 473.595. 5.16 Sec. 4. [473I.04] [COUNCIL DEBT OBLIGATIONS.] 5.17 Subdivision 1. [BONDS.] The council may by resolution 5.18 authorize the sale and issuance of bonds or notes for any of the 5.19 following purposes upon its determination that the conditions of 5.20 subdivision 3, paragraph (d), have been met: 5.21 (1) to provide funds to the commission in order that it may 5.22 enter into the arrangements necessary to assure a long-term 5.23 commitment of a NHL team; 5.24 (2) to refund bonds issued under this section; and 5.25 (3) to fund judgments entered by any court against the 5.26 council or commission in matters relating to the purposes of 5.27 sections 473I.01 to 473I.07. 5.28 Subd. 2. [PROCEDURE.] The bonds or notes may be sold, 5.29 issued, and secured in the manner provided in this section and 5.30 chapter 475 for bonds payable from revenues, and the council 5.31 shall have the same powers and duties as a municipality and its 5.32 governing body in issuing bonds or notes under chapter 475, 5.33 provided that this section shall control over chapter 475 to the 5.34 extent of any inconsistent provisions. The term of the bonds 5.35 and the term of any refunding bonds shall not exceed 30 years. 5.36 The council may pledge for the payment of the bonds or notes the 6.1 revenues from the appropriation in section 473I.07, or revenues 6.2 from arrangements and security interests that may be negotiated 6.3 as provided in subdivision 3, paragraph (d), and any revenues of 6.4 an admissions tax provided in subdivision 4, or any of them, as 6.5 the case may be. The bonds or notes may be sold at any price 6.6 and at public or private sale as determined by the council. 6.7 Each bond or note shall contain a statement that its principal 6.8 or interest is payable solely from the appropriation, revenues, 6.9 or funds as are pledged for its payment. The bonds or notes 6.10 shall be a special, limited obligation of the council, payable 6.11 solely from the revenues pledged thereto and shall not be 6.12 included in the net debt of the council or any city, county, or 6.13 other subdivision of the state for the purpose of any statutory 6.14 limitation of indebtedness. No election shall be required to 6.15 authorize the issuance of the bonds or notes. The principal 6.16 amount of the bonds or notes shall not be limited except as 6.17 provided in subdivision 3. Taxes and other revenues of the 6.18 commission attributable to the Metrodome or Met Center as 6.19 provided in sections 473.556, 473.581, 473.592, and 473.595, or 6.20 revenues of the commission attributable to the basketball and 6.21 hockey arena shall not be pledged or available for the payment 6.22 of bonds or notes issued under this section, nor shall any 6.23 appropriation under section 473I.07, be pledged or available for 6.24 bonds and notes issued under section 473.581. 6.25 Subd. 3. [LIMITATIONS.] (a) The principal amount of the 6.26 bonds issued under subdivision 1, exclusive of any original 6.27 issue discount, shall not exceed a total amount to be determined 6.28 as provided in paragraph (c). Amounts necessary to pay the 6.29 costs of issuance incurred by the council, amounts reimbursed to 6.30 the commission for its costs and expenses, and amounts 6.31 attributable to any bond insurance or other credit enhancement 6.32 may be paid from the bond proceeds but may not increase the 6.33 maximum principal amount provided for in paragraph (c). The 6.34 bonds may be issued as tax-exempt or taxable revenue bonds, in 6.35 the proportions that the council may determine. 6.36 (b) The proceeds of the bonds or notes issued pursuant to 7.1 this section, or the payments paid to the commission under 7.2 section 473I.03, subdivision 2, shall be paid to the commission 7.3 for the purposes of attracting and securing a long-term 7.4 commitment by the NHL team to play its home games at the 7.5 basketball and hockey arena and for the related purposes 7.6 referred to in this chapter. The commission shall first apply 7.7 the proceeds of the bonds or the transfer made under section 7.8 473I.03, subdivision 2, to the reimbursement of any expenses of 7.9 the commission related to or arising from the purposes of this 7.10 chapter, whenever incurred. 7.11 (c) The amount of the bonds that may be sold under 7.12 paragraph (a) shall not exceed the amount of indebtedness which 7.13 may be amortized over the term of the bonds by estimated tax 7.14 receipts of the state attributable to the ownership and 7.15 operations of the NHL team plus the amount of the admissions tax 7.16 or surcharge pledged and available under subdivision 4, if any, 7.17 reduced by the estimated amount of the appropriation under 7.18 section 473I.08, over the term of the bonds. The commissioner 7.19 of revenue shall make this determination and certify these 7.20 amounts to the council and commission prior to the issuance of 7.21 bonds or notes. The determination of the commissioner shall 7.22 remain in effect and shall not be changed so long as any bonds 7.23 or notes are outstanding. If bonds are not issued, then before 7.24 July 1, 1995, and July 1 of each year thereafter the 7.25 commissioner shall estimate the amount of tax receipts of the 7.26 state attributable to the operations of the NHL team anticipated 7.27 in the next calendar year following the date of enactment of 7.28 this chapter, and certify this amount to the legislature. The 7.29 amount of any annual appropriation, if any be made pursuant to 7.30 section 473I.07, shall not exceed the amount so certified by the 7.31 commissioner. 7.32 (d) The council may issue bonds under this section, when it 7.33 has received the certification of the commissioner under 7.34 paragraph (c) or may adopt a resolution authorizing the 7.35 transfers provided for in section 473I.03, subdivision 2, when 7.36 it has determined that the commission, the city of Minneapolis, 8.1 or the Minneapolis community development agency, or any or all 8.2 of them, as the commission may deem appropriate, has executed 8.3 agreements with the NHL team to use the basketball and hockey 8.4 arena for all scheduled regular season home games and play-off 8.5 home games, and for at least one of its exhibition games played 8.6 each season, or has entered into other arrangements that will 8.7 achieve a like purpose. If the council does not affirmatively 8.8 make its determination, any funds appropriated by the state and 8.9 paid to the council shall be repaid to the state by the 8.10 council. The agreements or arrangements shall be for a period 8.11 of not less than the term of the bonds or for a greater period 8.12 as the commission may determine or, if bonds are not issued, 8.13 then for a period as the commission may determine. The 8.14 agreements or arrangements may contain provisions negotiated 8.15 with the NHL team which provide for earlier termination of the 8.16 NHL team's commitment upon conditions related to the bankruptcy 8.17 or insolvency of the NHL team. The agreements or arrangements 8.18 shall contain provisions consistent with the Minneapolis 8.19 community development agency's ownership and operation of the 8.20 basketball and hockey arena. The agreements or arrangements 8.21 shall afford to the commission, the city of Minneapolis, the 8.22 Minneapolis community development agency, the council, or the 8.23 state, or each or all of them, as the commission deems 8.24 appropriate, the rights and remedies that are deemed necessary 8.25 and appropriate to provide reasonable assurances that the NHL 8.26 team shall comply with the agreements. The rights and remedies 8.27 may include the payment of liquidated damages equivalent to 8.28 direct and consequential damages incurred by reason of the 8.29 breach of the agreements, the equitable remedy of specific 8.30 performance, and any additional remedies at equity or law, an 8.31 option to purchase the NHL team, the assurance of private 8.32 ownership by residents of the state or any security or other 8.33 arrangements the commission reasonably determines to be 8.34 effective in accomplishing the purposes of this chapter. The 8.35 damages payment may be payable in a lump sum or in installments 8.36 as the commission may deem appropriate. The commission may 9.1 require that the agreements or arrangements include other terms 9.2 and conditions to provide reasonable assurances that the NHL 9.3 team or a successor major league professional hockey team will 9.4 play the required games at the basketball and hockey arena 9.5 during the term provided for in this paragraph, or, in the event 9.6 of a breach, to assure the payment of the required damages. The 9.7 agreements or arrangements shall address contingencies that may 9.8 arise in the event of a change of ownership of the NHL team. It 9.9 is the intention of the legislature that the rights and remedies 9.10 of the commission and of other public bodies which have 9.11 contracted or may contract with professional athletic teams for 9.12 the use of public facilities be construed liberally and in favor 9.13 of the public interest. 9.14 Subd. 4. [COUNCIL ADMISSIONS TAX.] The council may impose 9.15 an admissions tax or surcharge or both on tickets sold for 9.16 hockey games sponsored by the NHL team or other events sponsored 9.17 by the NHL team at the basketball and hockey arena, upon the 9.18 recommendation of the commission. If the commission so 9.19 recommends, the council may impose an admissions tax or 9.20 surcharge or both, in the amounts or at the rate as the council 9.21 may determine. If the bonds are not issued under subdivision 1, 9.22 the proceeds shall be transferred to the commission for the 9.23 purposes of this chapter. 9.24 Subd. 5. [SECURITY.] Subject to section 473I.06, the 9.25 appropriation provided in section 473I.07 and any funds pledged 9.26 for payment of the bonds shall be and remain pledged and 9.27 appropriated for the purposes specified in this section until 9.28 all bonds referred to in subdivision 1 are fully paid or 9.29 discharged in accordance with law. Bonds issued under this 9.30 section may be secured by a bond resolution or by a trust 9.31 indenture entered into by the council with a corporate trustee 9.32 within or outside the state which shall define the appropriation 9.33 and other revenues and properties, if any, pledged for the 9.34 payment and security of the bonds. The pledge shall be a valid 9.35 charge on the appropriation, if any, and any other funds pledged 9.36 for payment of the bonds from the date when bonds are first 10.1 issued or secured under the resolution or indenture and shall 10.2 secure the payment of principal and interest and redemption 10.3 premiums when due and the maintenance at all times of a reserve, 10.4 if any, securing the payments. The commission may, or the 10.5 council, upon recommendation of the commission, may grant or 10.6 obtain a mortgage or security interest in any real or personal 10.7 property of the NHL team, or in property of the council or the 10.8 commission obtained from the agreements or arrangements entered 10.9 into under this chapter, which may be assigned or granted to the 10.10 trustee for the further benefit or security of the bondholders. 10.11 The trustee shall have a valid security interest in the pledged 10.12 revenues or property, if any, received by the council or 10.13 commission as against the claims of all other persons in tort, 10.14 contract, or otherwise, irrespective of whether the parties have 10.15 notice of them, and without possession or filing as provided in 10.16 the Uniform Commercial Code or any other law. In the bond 10.17 resolution or trust indenture, the council may make the 10.18 covenants that are determined to be usual and reasonably 10.19 necessary for the protection of the bondholders. No pledge, 10.20 mortgage, covenant, or agreement securing bonds may be impaired, 10.21 revoked, or amended by law or by action of the council, 10.22 commission, or city, except in accordance with the terms of the 10.23 resolution or indenture under which the bonds are issued, until 10.24 the obligations of the council under the resolution or indenture 10.25 are fully discharged. 10.26 Sec. 5. [473I.05] [UNIVERSITY OF MINNESOTA ICE FACILITY.] 10.27 The University of Minnesota shall construct an addition to 10.28 or expansion of its existing indoor ice athletic facility, upon 10.29 further authorization by law for its financing. The University 10.30 of Minnesota shall enter into agreements with a NHL team or with 10.31 the commission providing that the university's existing indoor 10.32 ice athletic facility or any addition to or expansion of its 10.33 indoor ice athletic facility, if any is authorized by law, be 10.34 made available for NHL team practices, at no charge or cost to 10.35 the NHL team for the term of the agreements provided in section 10.36 473I.04, subdivision 3, paragraph (d), and upon additional terms 11.1 as the commission may determine necessary and appropriate to 11.2 promote the purposes of this chapter. 11.3 Sec. 6. [473I.06] [NO PLEDGE OF CREDIT OR TAXING POWER.] 11.4 The provisions of this chapter are not a pledge of the 11.5 faith, credit, and taxing power of the state or of the council 11.6 for the purposes of sections 473I.03 and 473I.04. The sole 11.7 obligation of the state under sections 473I.03 and 473I.04 shall 11.8 be to make payments to the council from funds that may be 11.9 appropriated. No provision of this chapter is intended to 11.10 create public debt and the appropriation under section 473I.07 11.11 is subject to repeal at any time. 11.12 Sec. 7. [473I.07] [APPROPRIATION.] 11.13 $....... is annually appropriated from the general fund to 11.14 the council for the payment of debt service on bonds issued by 11.15 the council under section 473I.04, subdivision 1, or for 11.16 transfer to the commission as provided in section 473I.03, 11.17 subdivision 2. 11.18 Sec. 8. [473I.08] [AMATEUR ICE ARENAS; APPROPRIATION.] 11.19 $....... is annually appropriated from the general fund to 11.20 the amateur sports commission for purposes consistent with the 11.21 provisions of sections 240A.09 and 240A.10, and, if any be 11.22 authorized by law, for payment of debt service on bonds issued 11.23 by the state for those purposes and the reduction of debt 11.24 service charges on the bond proceeds fund. 11.25 Sec. 9. [EFFECTIVE DATE; APPLICATION.] 11.26 This act is effective the day following final enactment and 11.27 sections 1 to 7 apply in the counties of Anoka, Carver, Dakota, 11.28 Hennepin, Ramsey, Scott, and Washington.