LRB-4398/1
EVM/MPG/KP:all
2023 - 2024 LEGISLATURE
September 28, 2023 - Introduced by Representatives Brooks, Duchow, Binsfeld,
Rozar, O'Connor, Plumer, Melotik, Schmidt, Michalski and Swearingen,
cosponsored by Senator Feyen. Referred to Committee on State Affairs.
AB438,2,2
1An Act to repeal 77.705, 77.707 (1), 77.76 (6), 229.64 (2), 229.65 (7), 229.66 (2)
2(b), 229.66 (2) (c), 229.66 (2) (g), 229.68 (11), 229.68 (15) and 229.682 (3);
to
3renumber 77.707 (2);
to renumber and amend 229.64 (1);
to amend 16.58
4(3), 77.54 (41), 77.707 (1), 77.71 (intro.), (1), (2), (3), (4) and (5), 77.76 (4), 79.037
5(2) (intro.), 79.037 (3), 229.65 (1), 229.66 (2) (a), 229.66 (4), 229.67, 229.68
6(intro.), 229.68 (4) (b), 229.68 (4) (d), 229.68 (7), 229.68 (9), 229.68 (12), 229.68
7(13), 229.68 (16) (intro.), 229.68 (16) (a), 229.682 (1), 229.682 (4), 229.682 (7),
8229.685 (1), 229.69 (4), 229.71, 229.75 (3), 229.76 and 341.14 (6r) (b) 13. b.;
to
9repeal and recreate 229.66 (3); and
to create 16.09, 25.17 (1) (es), 77.54 (9a)
10(gm), 79.037 (4), 229.65 (6m), 229.66 (2) (bm), 229.66 (2) (cm), 229.66 (2) (gm),
11229.68 (8) (d), 229.68 (8m), 229.6802, 229.6805, 229.682 (9), 229.682 (10),
12229.682 (11), 229.685 (3), 229.687, 229.695 and 229.80 of the statutes;
relating
1to: baseball park district administration and funding for improvement of
2professional baseball park facilities.
Analysis by the Legislative Reference Bureau
This bill directs state grants to and requires local funding of a local professional
baseball park district (district), directs the district's use of those funds, and modifies
the powers and administration of the district.
Current law
Under current law, a district is created in each county with a population of at
least 600,000 (presently, only Milwaukee County) and all counties that are
contiguous to that county (in relation to Milwaukee County, these counties are
Ozaukee County, Racine County, Washington County, and Waukesha County). A
district has a variety of powers. Among these, a district may acquire, construct,
equip, maintain, improve, operate, and manage baseball park facilities and may set
standards governing the use of, and the conduct within, baseball park facilities.
The district is governed by a district board, which currently consists of the
following members:
1. A number of persons equal to the number of counties within the jurisdiction
of the district plus one, which totals six members, appointed by the governor subject
to senate confirmation; three of whom serve two-year terms and three of whom serve
four-year terms, and all of whom may be removed only for cause.
2. Two persons appointed by the chief executive officer of the most populous
county within the jurisdiction of the district, which is Milwaukee County, who serve
at the pleasure of the chief executive officer.
3. One person for each county in the jurisdiction of the district other than
Milwaukee County, appointed by the chief executive officer of such county, who
serves at the pleasure of the appointing chief executive officer.
4. One person appointed by the mayor of the city of Milwaukee, who serves at
the pleasure of the mayor.
Current law authorizes a district to issue bonds for the purpose of constructing,
improving, and managing baseball park facilities, in addition to other related
functions. Bonds issued by the district are secured by the district's interest in any
baseball park facilities, by income from these facilities, and by a sales and use tax
current law authorizes the district to impose. Specifically, current law authorizes the
district to impose a sales and use tax at a rate of no more than 0.1 percent. However,
that sales and use tax ended on March 31, 2020, after the district certified to the
Department of Revenue that the district had effectively retired all of its bonds.
District creation and dissolution; district board membership
The bill limits the establishment of a district solely to a county with a
population over 750,000, rather than a county of 600,000 and its contiguous counties,
and specifies that upon the district's dissolution, the property of the district is
transferred to the state, rather than to the five counties making up the district under
current law.
The membership of the current members of the district's governing board,
described above, end on the bill's effective date, and the bill establishes a new
membership of the district's governing board. Under the bill, the board is composed
of the following:
1. Four members appointed by the governor subject to senate confirmation, one
of whom is appointed as chairperson of the board.
2. Two members appointed by the majority leader of the senate.
3. Two members appointed by the speaker of the assembly.
4. One member appointed by the governor from a list provided by the
professional baseball team as defined in the bill (Milwaukee Brewers) subject to
senate confirmation. This member may not participate in any nonpublic meeting or
vote with respect to the approval or amendment of a lease or nonrelocation
agreement between the district and the team, the district obtaining or accepting
short-term loans from the state, the district retaining a lease negotiator, or a dispute
between the district and the team.
All of the new members appointed to the district board variously serve either
two- or four-year terms but may be removed at the pleasure of the appointing
authority.
Additionally, the bill requires the new district board, not later than 90 days
after the effective date of the bill, to affirmatively determine whether to continue or
discontinue the employment of each individual employed by the district.
Changes to the district's general powers and duties
The bill makes the following changes to the district's general powers and duties:
1. Eliminates the district's authority to impose a sales and use tax. The district
has not imposed a sales tax since March 31, 2020.
2. Prohibits the district from issuing bonds or incurring other debt, except that
the bill authorizes the district to engage in certain short-term borrowing from DOA,
as further described below.
3. Requires the district to issue a request for proposals before awarding certain
contracts with an estimated cost exceeding $200,000 and to award contracts subject
to this requirement based on specified criteria. These criteria are price; time for
completion of work; qualifications and past performance of a contractor; contractor
responsiveness; contractor eligibility in accordance with the request for proposals;
the results of applicable inspections and tests; and performance standards
established by the district board. Under current law, the district may enter into
contracts subject to any standards established by the district board.
4. Provides that the district may enter into a lease only upon the affirmative
vote of a majority of all members appointed to the district board and eligible to vote
on the matter. Current law provides that such an action must be approved by 60
percent of the members voting on the matter.
5. During the term of any lease of baseball park facilities entered into by the
district and the Milwaukee Brewers, requires the district to, at the district's expense,
contract with a facility management company or employ an executive director with
expertise in managing and operating professional sports facilities and venues to
manage and supervise the development, construction, improvement, repair, and
maintenance of the baseball park facilities.
6. With certain exceptions, prohibits the district from initiating any capital
project after 2045.
7. Requires the district to contract with the state investment board to invest
funds held in the district's segregated fund, as described below.
Segregated fund
The bill requires the district to establish a baseball park facilities improvement
fund (segregated fund) into which it must deposit the state grants, payments from
or on behalf of Milwaukee County and the city of Milwaukee, certain payments from
the Milwaukee Brewers, and certain moneys transferred from other existing funds
of the district. Moneys from the segregated fund may be used only for the
development, construction, improvement, repair, and maintenance of baseball park
facilities, the performance of the district's obligations under a lease agreement with
the Milwaukee Brewers, lease negotiation costs, repayment of certain loans, and
payment of certain insurance premiums. The bill specifies that, with certain
exceptions, segregated fund moneys may not be expended after the Milwaukee
Brewers notify the district that the team intends to terminate the lease agreement
or the lease is otherwise terminated. In addition, segregated fund moneys may not
be expended for the development, construction, improvement, repair, or
maintenance of any physical structure that was not owned, operated, or leased by the
district on the effective date of the bill.
Lease and nonrelocation agreements
Under the bill, the state grant required under the bill, as described further
below, may not be awarded unless the secretary of administration determines that
all of the following apply:
1. The district has entered into a customary lease arrangement with the
Milwaukee Brewers that (a) has a standard term that expires no earlier than
December 31, 2050; (b) requires the Milwaukee Brewers to separately make at least
27 annual deposits in the amounts of $300,000 and $1,851,852 into the segregated
fund beginning in 2024; (c) requires the Milwaukee Brewers to additionally make at
least 27 annual payments in the amounts of $1,208,401 to the district beginning in
2024; (d) requires the Milwaukee Brewers, or a third party on the team's behalf, to
make financial contributions in connection with the development, construction,
improvement, repair, and maintenance of the baseball park facilities during the term
of the lease in an amount that totals $50,000,000, of which $25,000,000 must be so
contributed before January 1, 2037, and requires the team to regularly report to the
district all expenditures of those moneys; and (e) requires the Milwaukee Brewers,
upon expiration of the lease or termination of the lease as a result of breach by the
team, to disclaim any interest in moneys of the segregated fund and, upon request
of the district, convey and transfer to the district for consideration not to exceed $1
all of the team's right and title to the baseball park facilities, except for certain
ancillary improvements constructed or developed without financial contribution
from the state or the district.
2. The district has entered into a nonrelocation agreement with the Milwaukee
Brewers that generally requires the team to play all of its home games at the baseball
park facilities and prohibits the team from relocating until expiration or termination
of the lease according to its terms.
3. The district has contracted with a third party approved by a two-thirds vote
of all members appointed to the district board and eligible to vote on the matter to
represent the district in connection with negotiation of the lease and nonrelocation
agreements described above.
State grant
Provided the district and the Milwaukee Brewers execute the lease and
nonrelocation agreements described above, the bill requires DOA to award a grant
to the district to assist in the development, construction, improvement, repair, and
maintenance of baseball park facilities, consisting of the following:
1. $35,800,000 paid upon execution of the lease and nonrelocation agreements,
which is intended to substantially equal the total estimated state income tax
imposed in calendar years 2021, 2022, and 2023 on the payroll of the Milwaukee
Brewers franchise and of visiting professional baseball franchises using the
professional baseball park facilities.
2. The payment of an additional $25,000,000 upon execution of the lease and
nonrelocation agreements for the purpose of winterizing the baseball park facilities.
3. Twenty-two consecutive annual payments beginning in 2024 of which the
initial payment in 2024 must equal $13,400,000 and the amount of each subsequent
annual payment must increase from the initial payment at the rate of 4 percent per
year compounded annually, except that no such annual payment may exceed
$20,000,000, and beginning on July 1, 2041, no annual payment may exceed
$10,000,000. Additionally, no annual payment may be made after expiration or
termination of the lease.
Local government payments
The bill also provides that for the next 27 years Milwaukee County must pay
$5,000,000 and the city of Milwaukee must pay $2,500,000 annually into the
segregated fund to assist in the development, construction, improvement, repair,
and maintenance of the district's baseball park facilities. If Milwaukee County or the
city of Milwaukee fails to make the full amount of a required payment by July 1 of
an applicable year, DOA must reduce the supplemental county and municipal aid
payment to Milwaukee County or the city of Milwaukee, as applicable, for that year
by the amount that is not paid and deposit that amount into the segregated fund.
Short-term loans
The bill requires DOA to issue short-term loans to the district to assist in the
development, construction, improvement, repair, and maintenance of baseball park
facilities. Specifically, upon a majority vote of all members appointed to the district
board and eligible to vote on the matter, DOA must promptly issue a loan to the
district in the amount approved by the board. DOA may not issue more than a total
of $50,000,000 in such loans, and interest on each loan accrues monthly at a rate
equal to the state investment fund earnings rate during the immediately preceding
month, as certified by the secretary of DOA.
Under the bill, the district is required to pay all interest accruing on each loan
issued by DOA on a quarterly basis, and the outstanding balance of each loan must
be paid no later than 15 years after the date of loan issuance or upon expiration or
termination of the lease described above, whichever is earlier. The bill includes a
quarterly reporting requirement to the Joint Committee on Finance regarding the
loans and prohibits DOA from awarding a loan after December 31, 2045.
Sales and use tax exemption
The bill exempts the following from the sales and use tax: 1) tangible personal
property and taxable services sold to a district and 2) building materials, supplies,
and equipment sold to owners, contractors, subcontractors, or builders solely for the
improvement, repair, or maintenance of a professional sports and entertainment
home stadium. Under current law, building materials, supplies, and equipment sold
to owners, contractors, subcontractors, or builders solely for the construction,
renovation, or development of a professional sports and entertainment home
stadium are exempt from the sales and use tax.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB438,1
1Section
1. 16.09 of the statutes is created to read:
AB438,7,2
216.09 Grant to a local professional baseball park district. (1) Public
3purpose. The legislature finds and determines that baseball park facilities
4encourage economic development and tourism in this state, reduce unemployment
5in this state, preserve business activities within this state, generate additional tax
6revenues that would not exist without the baseball park facilities, and bring needed
7capital into this state for the benefit and welfare of people throughout the state. It
8is therefore in the public interest and serves a statewide public purpose, and it is the
9public policy of this state, to assist a local professional baseball park district created
1under subch. III of ch. 229 in the development, construction, improvement, repair,
2and maintenance of baseball park facilities.
AB438,7,3
3(2) Definitions. In this section:
AB438,7,44
(a) “Baseball park facilities” has the meaning given in s. 229.65 (1).
AB438,7,55
(b) “District” has the meaning given in s. 229.65 (5).
AB438,7,106
(c) “Gap payment” means payment of the amount specified in sub. (3) (a), which
7is intended to substantially equal the total estimated taxes imposed under ch. 71 in
8calendar years 2021, 2022, and 2023 on the payroll of the professional baseball team
9and of visiting professional baseball franchises using the professional baseball park
10facilities.
AB438,7,1111
(d) “Professional baseball team” has the meaning given in s. 229.65 (6m).
AB438,7,14
12(3) Grant. Subject to sub. (4), the department shall award a grant to a district
13to assist in the development, construction, improvement, repair, and maintenance
14of baseball park facilities. The grant shall consist of the following:
AB438,7,1615
(a) The gap payment of $35,800,000 upon execution of the lease and
16nonrelocation agreements satisfying s. 229.6802.
AB438,7,2117
(b) The payment of $25,000,000 upon execution of the lease and nonrelocation
18agreements satisfying s. 229.6802. The district shall maintain the moneys paid
19under this paragraph in a separate account in the baseball park facilities
20improvement segregated fund established under s. 229.687 and may expend the
21moneys only for the purpose of winterizing the baseball park facilities.
AB438,7,2322
(c) Twenty-two consecutive annual payments beginning in 2024, subject to the
23following:
AB438,7,2424
1. The initial payment in 2024 shall equal $13,400,000.
AB438,8,3
12. Except as provided in subd. 3., the amount of each subsequent annual
2payment shall increase from the initial payment at the rate of 4 percent per year
3compounded annually.
AB438,8,54
3. No annual payment may exceed $20,000,000, and beginning on July 1, 2041,
5no annual payment may exceed $10,000,000.
AB438,8,76
4. No annual payment may be made after expiration or termination of the lease
7specified in s. 229.6802 (1).
AB438,8,9
8(4) Contract requirements. The department may not award a grant under
9sub. (3) unless s. 229.6802 has been satisfied.
AB438,8,16
10(5) Loans to a local professional baseball park district. (a) Upon a majority
11vote of all current members appointed to the board of a district and eligible to vote
12on the matter, the department shall issue loans to the district to assist in the
13development, construction, improvement, repair, and maintenance of baseball park
14facilities. The department shall issue each loan in the amount approved by the board
15no later than 10 days after receipt of the board's request for the loan. The department
16may not issue more than a total of $50,000,000 in loans under this paragraph.
AB438,8,1917
(b) Interest on each loan issued under par. (a) shall accrue monthly at a rate
18equal to the state investment fund earnings rate during the immediately preceding
19month, as certified by the secretary.