SF 2098

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/16/2023 08:53am

A bill for an act
relating to state finances; providing for a process to refund the state stadium bonds;
reducing capital improvement expenses for the city of Minneapolis; repealing the
stadium general reserve account; making conforming changes; appropriating
money; amending Minnesota Statutes 2022, sections 16A.726; 297A.994,
subdivision 4; 473J.13, subdivisions 2, 4.

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

Section 1.

Minnesota Statutes 2022, section 16A.726, is amended to read:

16A.726 SPORTS FACILITIES TRANSFERS; APPROPRIATIONS.

(a) If state appropriation bonds have not been issued under section 16A.965, amounts
not to exceed the increased revenues estimated by the commissioner of management and
budget under section 297E.021, subdivision 2, are appropriated from the general fund to
the commissioner of management and budget to make transfers to the Minnesota Sports
Facilities Authority for stadium costs as defined under section 473J.03, subdivision 9.

(b) The commissioner shall make transfers to the Minnesota Sports Facilities Authority
required to make the state payments under section 473J.13, subdivisions 2 and 4, and for
the amount of Minneapolis taxes withheld under section 297A.994, subdivision 4, deleted text begin paragraph
(a), deleted text end clause deleted text begin (5) deleted text end new text begin (4) new text end . Amounts sufficient to make the transfers are appropriated to the
commissioner from the general fund.

(c) $2,700,000 is annually appropriated from the general fund from fiscal year 2014
through fiscal year 2033 to the commissioner of management and budget for a grant to the
city of St. Paul for the operating or capital costs of new or existing sports facilities.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023. This section does not affect
amounts retained for recapture of state advances through June 30, 2023.
new text end

Sec. 2.

Minnesota Statutes 2022, section 297A.994, subdivision 4, is amended to read:

Subd. 4.

General fund allocations.

The commissioner must retain and deposit to the
general fund the following amounts, as required by subdivision 3, clause (3):

(1) for state bond debt service support beginning in calendar year 2021, and for each
calendar year thereafter through calendar year 2046, periodic amounts so that not later than
December 31, 2046, an aggregate amount equal to a present value of $150,000,000 has been
deposited in the general fund. To determine aggregate present value, the commissioner must
consult with the commissioner of management and budget regarding the present value dates,
discount rate or rates, and schedules of annual amounts. The present value date or dates
must be based on the date or dates bonds are sold under section 16A.965, or the date or
dates other state funds, if any, are deposited into the construction fund. The discount rate
or rates must be based on the true interest cost of the bonds issued under section 16A.965,
or an equivalent 30-year bond index, as determined by the commissioner of management
and budget. The schedule of annual amounts must be certified to the commissioner by the
commissioner of management and budget and the finance officer of the city;

(2) for the capital improvement reserve appropriation to the Minnesota Sports Facilities
Authority beginning in calendar year 2021, and for each calendar year thereafter through
calendar year 2046, an aggregate annual amount equal to the amount paid by the state for
this purpose in that calendar year under section 473J.13, subdivision 4;

(3) for the operating expense appropriation to the Minnesota Sports Facilities Authority
beginning in calendar year 2021, and for each calendar year thereafter through calendar
year 2046, an aggregate annual amount equal to the amount paid by the state for this purpose
in that calendar year under section 473J.13, subdivision 2; new text begin and
new text end

deleted text begin (4) for recapture of state advances for capital improvements and operating expenses for
calendar years 2016 through 2020 beginning in calendar year 2021, and for each calendar
year thereafter until all amounts under this clause have been paid, proportionate amounts
periodically until an aggregate amount equal to the present value of all amounts paid by the
state have been deposited in the general fund. To determine the present value of the amounts
paid by the state to the authority and the present value of amounts deposited to the general
fund under this clause, the commissioner shall consult with the commissioner of management
and budget regarding the present value dates, discount rate or rates, and schedule of annual
amounts. The present value dates must be based on the dates state funds are paid to the
authority, or the dates the commissioner of revenue deposits taxes for purposes of this clause
to the general fund. The discount rates must be based on the reasonably equivalent cost of
state funds as determined by the commissioner of management and budget. The schedule
of annual amounts must be revised to reflect amounts paid under section 473J.13, subdivision
2, paragraph (b), for 2016 to 2020, and subdivision 4, paragraph (c), for 2016 to 2020, and
taxes deposited to the general fund from time to time under this clause, and the schedule
and revised schedules must be certified to the commissioner by the commissioner of
management and budget and the finance officer of the city, and are transferred as accrued
from the general fund for repayment of advances made by the state to the authority; and
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end to capture increases in taxes imposed under the special law, for the benefit of the
Minnesota Sports Facilities Authority, beginning in calendar year 2013 and for each calendar
year thereafter through 2046, there shall be deposited to the general fund in proportionate
periodic payments in the following year, an amount equal to the following:

(i) 50 percent of the difference, if any, by which the amount of the net annual taxes for
the previous year exceeds the sum of the net actual taxes in calendar year 2011 plus
$1,000,000, inflated at two percent per year since 2011, minus

(ii) 25 percent of the difference, if any, by which the amount of the net annual taxes for
the preceding year exceeds the sum of the net actual taxes in calendar year 2011 plus
$3,000,000, inflated at two percent per year since 2011.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023. This section does not affect
amounts retained for recapture of state advances through June 30, 2023.
new text end

Sec. 3.

Minnesota Statutes 2022, section 473J.13, subdivision 2, is amended to read:

Subd. 2.

Operating expenses.

(a) The authority must pay or cause to be paid all operating
expenses of the stadium. The authority must require in the lease or use agreement with the
NFL team that the NFL team pay the authority, beginning January 1, 2016, or other date as
mutually agreed upon by the parties, toward operating costs of the stadium, $8,500,000
each year, increased by a three percent annual inflation rate.

(b) Beginning January 1, 2016, or other date as mutually agreed upon by the parties,
and continuing through 2020, the state shall pay the authority operating expenses, $6,000,000
each year, increased by an annual adjustment factor. deleted text begin The payment of $6,000,000 per year
beginning in 2016 is a payment by the state, which shall be repaid to the state, using funds
as provided under section 297A.994, subdivision 4, clause (4). deleted text end After 2020, the state shall
assume this payment, using funds generated in accordance with the city of Minneapolis as
specified under section 297A.994, subdivision 4, clause (3).

(c) The authority may establish an operating reserve to cover operating expense shortfalls
and may accept funds from any source for deposit in the operating reserve. The establishment
or funding of an authority operating reserve must not decrease the amounts required to be
paid to the authority toward operating costs under this subdivision unless agreed to by the
authority.

(d) The authority will be responsible for operating cost overruns.

(e) After the joint selection of the third-party manager or program manager, the authority
may agree with a program manager or other third-party manager of the stadium on a fixed
cost operating, management, or employment agreement with operating cost protections
under which the program manager or third-party manager assumes responsibility for stadium
operating costs and shortfalls. The agreement with the manager must require the manager
to prepare an initial and ongoing operating plan and operating budgets for approval by the
authority in consultation with the NFL team. The manager must agree to operate the stadium
in accordance with the approved operating plan and operating budget.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023. This section does not affect
amounts retained for recapture of state advances through June 30, 2023.
new text end

Sec. 4.

Minnesota Statutes 2022, section 473J.13, subdivision 4, is amended to read:

Subd. 4.

Capital improvements.

(a) The authority shall establish a capital reserve fund.
The authority shall be responsible for making, or for causing others to make, all capital
repairs, replacements, and improvements for the stadium and stadium infrastructure. The
authority shall maintain, or cause others to maintain, the stadium and stadium infrastructure
in a safe, clean, attractive, and first-class manner so as to cause them to remain in a condition
comparable to that of other comparable NFL facilities of similar design and age. The authority
shall make, or cause others to make, all necessary or appropriate repairs, renewals, and
replacements, whether structural or nonstructural, interior or exterior, ordinary or
extraordinary, foreseen or unforeseen, in a prompt and timely manner. In addition, the
authority, with approval of the NFL team, may enter into an agreement with a program
manager to perform some or all of the responsibilities of the authority in this subdivision
and to assume and accept financial liability for the cost of performing the responsibilities.

(b) The NFL team must contribute $1,500,000 each year, beginning in 2016 or as
otherwise determined for the term of the lease or use agreement to the capital reserve fund,
increased by a three percent annual inflation rate.

(c) The state shall contribute $1,500,000 each year, beginning in 2016 or as otherwise
determined for the term of the lease to the capital reserve fund. The contributions of the
state are subject to increase by an annual adjustment factor. deleted text begin The contribution under this
paragraph by the state from 2016 through 2020 shall be repaid to the state using funds in
accordance with section 297A.994, subdivision 4, clause (4).
deleted text end

(d) The authority with input from the NFL team shall develop short-term and long-term
capital funding plans and shall use those plans to guide the future capital needs of the stadium
and stadium infrastructure. The authority shall make the final determination with respect
to funding capital needs. Any capital improvement proposed by the NFL team intended
primarily to provide revenue enhancements to the NFL team shall be paid for by the NFL
team, unless otherwise agreed to with the authority.

(e) The NFL team has authority to determine the design of a retractable roof feature for
the stadium. The NFL team must cooperate with the authority in designing the feature to
minimize any additional operating cost. The design must not result in a material marginal
increase in the operating or capital costs of the stadium, considering current collections and
reserves.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023. This section does not affect
amounts retained for recapture of state advances through June 30, 2023.
new text end

Sec. 5. new text begin DEBT PAYOFF AND CONDITIONAL APPROPRIATION.
new text end

new text begin If the commissioner of management and budget elects to apply an amount from the
general reserve account established in Minnesota Statutes, section 297E.021, subdivision
4, to prepayment of debt issued under Minnesota Statutes, section 16A.965, during fiscal
year 2023, and if the amount available in the general reserve account is not sufficient to
prepay the debt in full, including any accrued interest and associated financing costs, then
an amount from the general fund is appropriated to the commissioner in fiscal year 2023
that, when added to the amount available in the general reserve account, is sufficient to
allow the commissioner to prepay the debt in full.
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 CONDITIONAL REPEALER.
new text end

new text begin When bonds authorized under Minnesota Statutes, section 16A.965, are no longer
outstanding, the commissioner of management and budget must notify the revisor of statutes
within 30 days of the final payment, and Minnesota Statutes, sections 16A.965 and 297E.021,
are repealed the day following the notification.
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