Minnesota Legislature
SF 1857
3rd Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to a stadium; financing a major league 1.3 professional baseball stadium; requiring private 1.4 funding; providing for an interest-bearing loan; 1.5 providing for certain tax exemptions; creating a site 1.6 selection commission; providing for the issuance of 1.7 bonds; transferring funds from the assigned risk plan; 1.8 requiring enhanced revenue sharing by major league 1.9 baseball for act to take effect; appropriating money; 1.10 amending Minnesota Statutes 2000, sections 272.02, by 1.11 adding a subdivision; 297A.67, by adding a 1.12 subdivision; 297A.71, by adding a subdivision; 1.13 proposing coding for new law in Minnesota Statutes, 1.14 chapter 4A. 1.15 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.16 Section 1. [4A.11] [SELECTION PROCESS; BASEBALL PARK.] 1.17 Subdivision 1. [DEFINITION.] For purposes of this act, a 1.18 "unit of local government" must be a city located within the 1.19 geographical boundaries of the metropolitan area as defined in 1.20 section 473.121, subdivision 2. 1.21 Subd. 2. [BASEBALL PARK.] The strategic and long-range 1.22 planning office shall assist the baseball site commission formed 1.23 under subdivision 3 in a process to provide for the construction 1.24 of an open-air baseball park to be built to the specifications 1.25 of the major league professional baseball team and the unit of 1.26 local government selected as a site for the stadium. 1.27 Subd. 3. [BASEBALL SITE COMMISSION.] The governor shall 1.28 appoint nine persons to serve on a baseball stadium site 1.29 selection commission and shall make these appointments within 15 1.30 days of the date the determination is made under section 4A.16. 2.1 One person shall be appointed from each of Minnesota's eight 2.2 congressional districts. The ninth person shall be the director 2.3 of the strategic and long-range planning office who shall serve 2.4 as chair. Members of the commission shall not receive 2.5 compensation for their service but may be compensated for 2.6 expenses by the strategic and long-range planning office. The 2.7 commission shall select a stadium site. 2.8 Subd. 4. [SELECTION PROCESS.] (a) The baseball site 2.9 commission shall select a unit of local government to provide a 2.10 site for the new baseball park. 2.11 (b) The required elements of the selection process are: 2.12 (1) the baseball site commission shall accept bids from any 2.13 interested unit of local government; 2.14 (2) acceptable bids must provide, at a maximum, for the 2.15 provision of land, in a condition appropriate for development, 2.16 and the provision of sufficient adjacent parking facilities to 2.17 be made available for use by the team on game days; 2.18 (3) bids may not include other subsidies except private 2.19 improvements for the enhancement of the baseball park; 2.20 (4) in selecting a site, the baseball site commission shall 2.21 consider public infrastructure costs and significant potential 2.22 development advantages; and 2.23 (5) the baseball site commission shall end the acceptance 2.24 of bids 90 days after this act is made effective by the 2.25 determination under section 4A.16 and shall select a site for a 2.26 new baseball stadium within 60 days of the end date for 2.27 acceptance of bids. 2.28 Sec. 2. [4A.12] [FINANCING.] 2.29 Subdivision 1. [PRIVATE FUNDING.] At least one-half of the 2.30 cost of the baseball park must be funded by the owner of the 2.31 major league professional baseball team or through other private 2.32 sector funding. The local unit of government and private 2.33 investors shall jointly be the owner of the baseball park. The 2.34 local unit of government shall enter into an agreement with a 2.35 major league baseball team that provides for a long-term lease 2.36 of not less than 30 years. The total cost of the baseball 3.1 stadium, not including land and parking development, shall not 3.2 exceed $300,000,000. 3.3 Subd 2. [LOAN.] (a) Upon final disposition of Ramsey 3.4 county court case number C7005714, styled Danny's Trannys, Inc. 3.5 v. The State of Minnesota et al., and certification by the 3.6 commissioner of finance that the resolution of this case has not 3.7 reduced surplus funds in the assigned risk plan below a level 3.8 necessary to complete this loan, the commissioner shall provide 3.9 a loan in the amount of $100,000,000, bearing interest at the 3.10 rate of three percent per year from the revolving stadium loan 3.11 fund created under section 4A.13 to the unit of local government 3.12 selected to own the new stadium to be repaid by the owner of the 3.13 major league professional baseball team into the revolving 3.14 stadium loan fund. The commissioner shall provide these funds 3.15 to the unit of local government when funds from the professional 3.16 baseball team specified under subdivision 1 are made available 3.17 to that unit of government. 3.18 (b) Scheduled dates for the repayment of the loan shall 3.19 begin one year after the first baseball game is played in the 3.20 new stadium or two years from the date of substantial 3.21 completion, whichever is later, and shall be repaid under terms 3.22 to be agreed to in a contract to be signed with the major league 3.23 baseball team and the director of the strategic and long-range 3.24 planning office. The loan shall be guaranteed by the full faith 3.25 and credit of the major league baseball team. 3.26 (c) If insufficient funds exist in the revolving stadium 3.27 loan account to make the full loan under this subdivision, the 3.28 commissioner shall make a partial loan of such funds as are 3.29 available and shall complete the loan with funds received by the 3.30 revolving stadium loan fund at a later date. 3.31 Subd. 3. [BONDS.] Revenues from the bonds sold under 3.32 section 4A.13, subdivision 4, are appropriated to the local unit 3.33 of government selected under this act for the construction of 3.34 the stadium. 3.35 Subd. 4. [CONSTRUCTION.] The major league professional 3.36 baseball team shall construct the baseball stadium and shall be 4.1 responsible for all cost overruns that may occur. All funds 4.2 appropriated to the unit of local government under this act 4.3 shall be managed by the unit of local government or designated 4.4 fiscal agent and made available to the team as the team deems 4.5 necessary for construction purposes. 4.6 Sec. 3. [4A.13] [REVOLVING STADIUM LOAN FUND.] 4.7 Subdivision 1. [CREATION.] A revolving stadium loan fund 4.8 is created as an account within the special revenue fund. 4.9 Subd. 2. [RIVERCENTRE PAYMENT.] Notwithstanding Laws 1998, 4.10 chapter 404, section 23, subdivision 6, paragraph (b), the 4.11 commissioner shall deposit the repayments under that same 4.12 paragraph (b) in the revolving stadium loan fund to be 4.13 maintained by the commissioner for use in the construction of 4.14 stadiums in the metropolitan area. 4.15 Subd. 3. [ASSIGNED RISK PLAN TRANSFER.] The commissioner 4.16 of finance shall transfer $100,000,000 from the assigned risk 4.17 plan created under section 79.252 to the revolving stadium loan 4.18 fund one week after this act is made effective under section 4.19 4A.16. Funds from the repayment of the loan made under section 4.20 4A.12, subdivision 2, are to be transferred to the assigned risk 4.21 plan by the commissioner to repay all funds transferred from the 4.22 assigned risk plan under this section. 4.23 Subd. 4. [BONDS.] The metropolitan council shall issue 20 4.24 year revenue bonds in an amount not to exceed $40,000,000. Debt 4.25 service for these bonds shall be paid from the revolving stadium 4.26 loan fund. Each year the commissioner of finance shall transfer 4.27 the amount necessary from the revolving stadium loan fund to the 4.28 metropolitan council to cover the cost of bonds issued under 4.29 this subdivision. Funds raised from these bonds shall be used 4.30 to pay construction costs of the new stadium. 4.31 Subd. 5. [NAMING RIGHTS.] Naming rights from the major 4.32 league baseball stadium shall be sold by the unit of local 4.33 government that owns the stadium. Revenues from that sale are 4.34 to be retained by the unit of local government and must be used 4.35 for operating costs of the stadium. Any excess revenues after 4.36 operating costs are compensated for must be held by the unit of 5.1 local government in a reserve account, and used for long-term 5.2 refurbishment of the stadium. 5.3 Sec. 4. [4A.14] [OBLIGATIONS; MAJOR LEAGUE PROFESSIONAL 5.4 BASEBALL TEAM.] 5.5 Subdivision 1. [OBLIGATIONS PRIOR TO STATE 5.6 ASSISTANCE.] (a) The major league professional baseball team 5.7 must fully and completely do its part to accomplish the 5.8 requirements of paragraphs (b) and (c) before it receives any 5.9 state assistance. 5.10 (b) The requirements are that: 5.11 (1) a signed lease for not less than 30 years between the 5.12 unit of local government selected by the council and the major 5.13 league professional baseball team must be completed, with no 5.14 escape clauses; 5.15 (2) the commissioner of finance must certify that the major 5.16 league professional baseball team can and will make available 5.17 $150,000,000 in private cash support to the local unit of 5.18 government for the construction of a baseball stadium; 5.19 (3) the major league baseball team has signed an agreement 5.20 with the unit of local government agreeing to allow the stadium 5.21 to be available on nongame days for potential use by the 5.22 University of Minnesota, Minnesota state colleges and 5.23 universities, private colleges, and the state high school 5.24 league; and 5.25 (4) the team shall specify in a signed agreement that no 5.26 transfer of ownership or equity in the team shall in any way 5.27 abrogate obligations under this act or under any lease signed 5.28 pursuant to this act. 5.29 (c) By January 1, 2002, the commissioner of finance shall 5.30 report to the chair of the senate committee on finance and the 5.31 chair of the house committee on ways and means the terms of an 5.32 agreement between the major league baseball team and the amateur 5.33 sports commission whereby the team agrees to make the baseball 5.34 park available to the commission on terms satisfactory to the 5.35 commission for amateur sports activities consistent with the 5.36 purposes of Minnesota Statutes, chapter 240A, each year during 6.1 the time a loan from the revolving stadium loan fund is 6.2 outstanding. The amateur sports commission must negotiate in 6.3 good faith and may be required to pay no more than actual 6.4 out-of-pocket expenses for the time it uses the baseball park. 6.5 The agreement may not become effective before February 1, 2002. 6.6 During any calendar year after 2002 that an agreement under this 6.7 paragraph is not in effect and a payment is due under the loan 6.8 agreement, the lessee must pay to the commissioner a penalty of 6.9 $750,000 for that year. If the amateur sports commission has 6.10 not negotiated in good faith, no penalty is due. 6.11 Subd. 2. [OBLIGATIONS DURING CONSTRUCTION.] (a) The major 6.12 league professional baseball team has the obligations in 6.13 paragraph (b) during the period of construction of a baseball 6.14 stadium. 6.15 (b) The obligations are: 6.16 (1) the payment of prevailing wage levels as defined under 6.17 section 177.42 to all construction workers; 6.18 (2) the provision to the strategic and long-range planning 6.19 office of a signed agreement between the professional baseball 6.20 team and the construction unions that will work on the new 6.21 stadium that mandates a no-strike and no-lockout period during 6.22 construction of the baseball stadium; 6.23 (3) the payment of any cost overruns that occur during the 6.24 construction period; and 6.25 (4) all construction materials for the baseball park 6.26 produced from or containing steel must use steel produced in the 6.27 United States. 6.28 Subd. 3. [OPERATIONS AND MAINTENANCE.] The major league 6.29 baseball team must operate and maintain the stadium in excellent 6.30 condition during the duration of the lease. The local unit of 6.31 government where the stadium is located shall verify that the 6.32 team complies with this requirement. 6.33 Subd. 4. [MAJOR LEAGUE BASEBALL GUARANTY.] Before making a 6.34 loan under section 4A.12, the director of the office of 6.35 strategic and long-range planning must execute an agreement with 6.36 the major league of which the baseball team is a member and with 7.1 major league baseball that, to the extent applicable under 7.2 federal law, guarantees the continuance of a major league 7.3 franchise in the metropolitan area for at least the term of the 7.4 loan under section 4A.12, subdivision 2. 7.5 Sec. 5. [4A.15] [OBLIGATIONS; STRATEGIC AND LONG-RANGE 7.6 PLANNING OFFICE.] 7.7 The director of the strategic and long-range planning 7.8 office shall negotiate and sign a contract, on behalf of the 7.9 state, to include a schedule for repayment of the loan made 7.10 under section 4A.12, subdivision 2. 7.11 Sec. 6. [4A.16] [GOVERNOR'S DETERMINATION; AUTHORIZATION 7.12 OF LOAN.] 7.13 (a) The governor shall appoint a special panel consisting 7.14 of three retired state court judges. The special panel shall 7.15 review information from major league baseball to determine if 7.16 major league baseball and the major league baseball players' 7.17 association have agreed upon a new economic system, including 7.18 enhanced revenue sharing that makes baseball more competitive, 7.19 protects the financial interest of teams with below average 7.20 revenues, and enhances the viability of any new baseball park. 7.21 The special panel shall provide its determination to the 7.22 governor and to the legislative commission on planning and 7.23 fiscal policy. 7.24 (b) The panel may not make these findings under paragraph 7.25 (a), unless the agreement between major league baseball and the 7.26 major league baseball players' association is estimated to 7.27 satisfy at least one of the following: 7.28 (1) the increases in revenue sharing among major league 7.29 baseball teams is estimated, after full implementation of the 7.30 agreement, to reduce the disparity in team revenues so that the 7.31 revenues of the teams with revenues in the top quartile will be, 7.32 on average, no more than 40 percent higher than the average 7.33 revenues of teams in the bottom quartile (ranked by total 7.34 revenues); 7.35 (2) as a result of increases in revenue sharing, 7.36 limitations on payrolls, or other elements of the agreement, the 8.1 ratio of payrolls of the teams in the top quartile to teams in 8.2 the bottom quartile (ranked by payrolls) is estimated, after 8.3 full implementation of the agreement, to average 2:1 or less; or 8.4 (3) the agreement substantially implements four or more of 8.5 the recommendations, excluding the recommendation that teams be 8.6 allowed to move if they cannot succeed economically, of "The 8.7 Report of the Independent Members of the Commissioner's Blue 8.8 Ribbon Panel on Baseball Economics," dated July 2000. 8.9 The estimates under this paragraph must be made by either 8.10 the commissioner of finance or an independent consultant 8.11 retained by the commissioner of finance. 8.12 (c) The legislative commission on planning and fiscal 8.13 policy shall review the determination and make its advisory 8.14 recommendation to the governor on whether to authorize the state 8.15 to make a loan under this act. The governor may authorize the 8.16 state to make a loan under this act only after considering the 8.17 recommendations and determining that major league baseball and 8.18 the major league baseball players' association have agreed upon 8.19 a new economic system, including enhanced revenue sharing that 8.20 makes baseball more competitive, protects the financial 8.21 interests of teams with below average revenues, and enhances the 8.22 viability of any new baseball park. 8.23 Sec. 7. [4A.17] [SALE OF BASEBALL FRANCHISE.] 8.24 Subdivision 1. [APPLICATION.] As a condition of a loan 8.25 being made under section 4A.12, the owner of the major league 8.26 professional baseball team must agree that before the owner 8.27 sells a majority ownership interest in the team, the owner will 8.28 attempt for at least 18 months to comply with subdivision 2 or 8.29 with subdivision 3. 8.30 Subd. 2. [COMMUNITY OWNERSHIP.] The owner of the team must 8.31 work with the governor, the commissioner, and a community 8.32 foundation or corporation on a plan to: 8.33 (1) transfer by gift to the foundation or corporation all 8.34 ownership interests in the team; 8.35 (2) provide for sale of shares in the team by the 8.36 foundation or corporation to the community, in a manner such 9.1 that: 9.2 (i) one individual or entity who is the managing partner 9.3 may own up to 25 percent of the voting stock; 9.4 (ii) no other individual or entity may own more than five 9.5 percent of the voting stock; and 9.6 (iii) at least 50 percent of the voting stock must be 9.7 dispersed so that no person owns more than one percent; and 9.8 (3) ensure that the franchise may not move from Minnesota 9.9 without approval of 80 percent of the shares of voting stock. 9.10 Subd. 3. [LOCAL PRIVATE OWNERSHIP.] The owner of the team 9.11 must attempt to reach an agreement on the sale of a majority 9.12 interest in the team to one or more Minnesota buyers before 9.13 attempting to sell the majority interest to others. 9.14 Subd. 4. [REPORT.] If the owner of the team attempts to 9.15 sell a majority interest in the team, the commissioner must 9.16 report to the legislature at the beginning of the next 9.17 legislative session on efforts to work with the owner of the 9.18 team to implement this section. 9.19 Sec. 8. Minnesota Statutes 2000, section 272.02, is 9.20 amended by adding a subdivision to read: 9.21 Subd. 45. [BASEBALL PARK.] If a major league baseball team 9.22 acquires, owns, leases, controls, uses, or occupies a stadium 9.23 site, the stadium's real or personal property is exempt from 9.24 taxation but the property is subject to special assessments 9.25 levied by a political subdivision for a local improvement in 9.26 amounts proportionate to and not exceeding the special benefit 9.27 received by the property from the improvement. A use of the 9.28 property in any manner different from its use under sections 9.29 4A.11 to 4A.16 at the time must not be considered in determining 9.30 the special benefit received by the properties. Notwithstanding 9.31 section 272.01, subdivision 2, or 273.19, real or personal 9.32 property at the site of the baseball park leased by the local 9.33 unit of government that operates the baseball park to another 9.34 person for uses related to the purposes of sections 4A.11 to 9.35 4A.16 is exempt from taxation regardless of the length of the 9.36 lease. This subdivision shall expire one month after repayment 10.1 of the loan made under section 4A.12, subdivision 2. 10.2 Sec. 9. Minnesota Statutes 2000, section 297A.67, is 10.3 amended by adding a subdivision to read: 10.4 Subd. 26. [TAX EXEMPTIONS AT STADIUM SITE.] Sales of 10.5 admissions, tangible personal property, novelties, food, 10.6 beverages, parking services, club seats and suites, advertising, 10.7 and other retail sales at the site of the baseball park 10.8 constructed under section 4A.12 are exempt from all state and 10.9 local sales taxes. The lease agreement must provide that an 10.10 amount equal to seven percent of the sale price of the items 10.11 exempted under this subdivision must be used by the team for 10.12 payment of costs of operation and maintenance of the stadium, 10.13 including those costs incurred by amateur sports use of the 10.14 baseball park. This subdivision shall expire one month after 10.15 repayment of the loan made under section 4A.12, subdivision 2. 10.16 Sec. 10. Minnesota Statutes 2000, section 297A.71, is 10.17 amended by adding a subdivision to read: 10.18 Subd. 23. [CONSTRUCTION MATERIALS; BASEBALL 10.19 PARK.] Materials, supplies, or equipment used or consumed in the 10.20 construction, equipment, or improvement of the baseball park 10.21 constructed under sections 4A.11 to 4A.16, are exempt. 10.22 Sec. 11. [EFFECTIVE DATE.] 10.23 Sections 1 and 6 are effective the day following final 10.24 enactment. Sections 2 to 5 and 7 to 10 are effective upon the 10.25 determination under section 6.