SE5 AB1: Bill Text Engrossed

LRB-4530/1

MS/JK/JS/SH:kmg:hbm

September 1995 Special Session

1995 - 1996 LEGISLATURE

Engrossed Assembly BILL 1

September 28, 1995 - Printed by direction of Senate Chief Clerk.

AB1-engrossed,2,7 An Act to repeal 71.05 (1) (d) (title) and 71.05 (1) (e) (title); to renumber and amend 71.05 (1) (c), 71.05 (1) (d) and 71.05 (1) (e); to amend 13.94 (4) (a) 1., 16.70 (14), 19.42 (13) (a), 19.59 (1) (a), 20.505 (1) (ka), 20.505 (1) (kc), 20.835 (4) (g), 25.50 (1) (d), 66.066 (1) (a), 66.066 (1) (c), 66.067, 66.30 (1) (a), 71.26 (1) (bm), 71.36 (1m), chapter 77 (title), subchapter V (title) of chapter 77 [precedes 77.70], 77.71 (intro.) and (1), 77.71 (2), 77.71 (3) and (4), 77.73, 77.75, 77.76 (1), 77.76 (2), 77.77, 77.78, 234.65 (1) (c) and 234.65 (6) (b); and to create 13.94 (10), 16.82 (6), 16.82 (7), 16.854, 18.03 (5s), 19.59 (1) (g), 20.566 (1) (gd), 20.835 (4) (gb), 24.61 (2) (a) 7., 25.17 (3) (b) 10., 66.04 (2) (a) 3p., 66.066 (5), 71.05 (1) (c) 4., 71.26 (1m) (g), 71.45 (1t) (g), 77.705, 77.707, 77.76 (3m), 219.09 (1) (c), subchapter III of chapter 229 [precedes 229.64], 234.65 (1) (h), 234.65 (1) (hm), 234.65 (8) and (10) and 704.31 (3) of the statutes; relating to: creating a local professional baseball park district in certain jurisdictions; giving a local professional baseball park district the authority to issue bonds and granting income tax exemptions for interest income on bonds issued by the district; making a state moral obligation pledge with respect to bonds issued by a local professional baseball park district; giving a local professional baseball park district the authority to impose a sales tax and a use tax; creating an income and franchise tax exemption for a local professional baseball park district; creating an exception for a local professional baseball park district from certain landlord-tenant provisions; increasing a limitation on certain economic development bonding by the Wisconsin Housing and Economic Development Authority; a smoke-free environment; making appropriations; and providing a penalty.

Analysis by the Legislative Reference Bureau

Engrossment information:

The text of Engrossed September 1995 Special Session Assembly Bill 1 consists of the following documents adopted in the assembly on September 27 and 28, 1995: Assembly Substitute Amendment 1, as affected by the following Assembly Amendments: Assembly Amendment 9, Assembly Amendment 11, Assembly Amendment 18, Assembly Amendment 19, Assembly Amendment 24, Assembly Amendment 26, Assembly Amendment 29, Assembly Amendment 32, Assembly Amendment 33 and Assembly Amendment 34.

Creation and dissolution of a district

This bill creates a professional baseball park district, which is a special purpose district, in each county with a population of at least 500,000 (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) unless one of the contiguous counties is already included in a district, in which case a single-county jurisdiction is created that consists of the county with a population of more than 500,000. A district is a local unit of government that is a body corporate and politic and that is separate and distinct from, and independent of, the state.

In connection with baseball park facilities, the powers of a district include the construction, maintenance, management and promotion of the baseball park and facilities; the issuance of bonds and imposition of taxes to finance the park and facilities; and the authority to enter into partnerships, joint ventures, common ownership or other arrangements with other persons to further the district's purposes. A district may also set standards governing the use of, and the conduct within, the park and facilities, and may set and collect fees for the use of the facilities.

The district is governed by a board that consists of 6 persons appointed by the governor, 2 persons appointed by the chief executive officer of the most populous county within the district's jurisdiction, one person appointed by the chief executive officer of each of the other counties in the jurisdiction and one person appointed by the mayor of the most populous city within the jurisdiction. In single-county districts, all county appointments are made by the chief executive officer of that single county.

Once a county in included within the jurisdiction of a district, the county remains in the district until the district is dissolved. A district may dissolve by action of the district board, subject to payment of the district's bonds and fulfillment of its other contractual obligations. If a district is dissolved, its property must be transferred to the counties in the district's jurisdiction, based on the tax revenues derived from each county.

Bonding

This bill grants a district the power to issue bonds for purchasing, acquiring, leasing, constructing, extending, adding to, improving, conducting, controlling, operating or managing a public utility, which is defined to include a local professional baseball park. The district is generally subject to the provisions which govern revenue bonding of municipalities for public utilities. Under the bill, bonds issued by the district must be secured only by the district's interest in any baseball park facilities, including any interest in a lease with the department of administration, by income from these facilities, and by certain specified taxes that the district is authorized to levy. The district may not pledge its full faith and credit on the bonds and the bonds are not a liability of the district.

A district may designate one or more accounts as special debt service reserve funds, if, prior to each issuance of bonds to be secured by the special debt service reserve fund, the secretary of administration makes certain determinations. In order to create a special debt service reserve fund, the secretary must find that the bond proceeds must be used in connection with a baseball park facility that is used primarily to support the activities of a baseball park. The secretary must also find that there is a reasonable likelihood that the bonds will be repaid without the necessity of drawing on funds in the special debt service reserve fund and that the amount of all bonds that would be secured by all special debt service reserve funds of the district does not exceed $160,000,000. This limit does not include refunding bonds or bonds whose proceeds are used to make a deposit into a special debt service reserve fund or to pay issuance costs or capitalized interest costs. The secretary must also find that the bonds, other than refunding bonds, will be issued no later than December 31, 2000.

The bill establishes a formula for calculating the special debt service reserve fund requirement for a special debt service reserve fund. If the special debt service reserve fund requirement for a special debt service reserve fund is not met, the bill expresses the legislature's expectation and aspiration that, if certain conditions are met, the legislature would appropriate to the district the funds necessary to restore the special debt service reserve fund to an amount equal to its special debt service reserve fund requirement. This expression of legislative expectation and aspiration has been referred to as a state moral obligation pledge. In addition to the state moral obligation pledge, under the bill the state pledges that it will not limit or alter the rights vested in a district under the bill before the district has fully performed its contracts and has fully met and discharged its bonds.

In addition to provisions regarding bond issuance and security, the bill contains a number of other provisions relating to bonds issued by a district. The bill also contains provisions authorizing certain state funds and certain regulated financial institutions to invest in bonds issued by the district. The bill provides that all moneys received by a district, including proceeds from the sale of bonds, are trust funds to be held and applied solely for the purposes provided in the bill, but limits the personal liability of members of a district's board of directors with respect to the issuance of bonds.

Under current law, the Wisconsin Housing and Economic Development Authority (WHEDA) may issue bonds and notes for certain economic development projects involving sports and entertainment home stadiums in an amount not to exceed $35,000,000 plus such additional amounts as WHEDA considers necessary or appropriate to fund a deposit into the capital reserve fund. The bill increases this amount to $50,000,000 and also allows WHEDA to add, along with the capital reserve fund deposits, the costs of issuing the bonds or notes and capitalized interest.

Under current law, these economic development projects are included in determining compliance with an overall $200,000,000 cap on WHEDA economic development loans. This bill amends this overall cap to exclude bonds issued for these economic development projects involving sports and entertainment home stadiums.

The bill however, prohibits WHEDA from issuing bonds to finance any single professional baseball park in an amount exceeding $50,000,000, excluding bonds issued to fund a deposit into a capital reserve fund, to pay costs of issuing the bonds or to pay capitalized interest. In addition, the bill prohibits WHEDA from making an economic development project loan to any professional baseball team unless WHEDA determines that collateral adequate to cover the amount of the loan has been pledged as security for the loan, exclusive of any ownership interest of the team in a stadium.

Taxation

The bill authorizes a district to impose a sales tax and a use tax at a rate of no more than 0.1%.

The bill exempts the income of a district from the income tax and the franchise tax, and it exempts the interest on a district's bonds from the income tax.

Provision of services

The bill permits DOA to provide any services to a district, including engineering, design and building construction services, upon request of the district, for compensation agreed upon between DOA and the district, if the district has entered into an agreement with DOA for the lease of land or other property granted to the state, especially dedicated by the grant to use for a professional baseball park. Other state agencies may provide assistance to the district, if a lease with DOA has been entered into.

Contracting

The bill provides that a local professional baseball park district may enter into contracts without limitation or restriction and, if the district has entered into an agreement with DOA for the lease of land or other property granted to the state, especially dedicated by the grant to use for a professional baseball park, the district may utilize the services of DOA to let contracts for engineering, architectural or construction work, except that DOA may not serve as a general contractor for such work. Whether the district contracts independently or through DOA, the district is not subject to any state requirements for public notice of proposed contracts, competitive bidding, contractual service procurement procedures, preference for procurements from Wisconsin firms, preferences for purchases of American-made or recycled or recovered materials or preferences for purchases from the department of corrections or from handicapped work centers or nondiscrimination in contracting.

Regarding the construction of baseball park facilities, a district and DOA are required to ensure that, for construction work and professional services contracts, a person who receives such a contract agrees that his or her goal shall be to ensure that at least 25% of the employes hired because of the contract will be minority group members and at least 5% of the employes hired because of the contract will be women. It is also a goal of the district and DOA to ensure that at least 25% of the aggregate dollar value of contracts awarded by the district and DOA, in the areas of construction of baseball park facilities, professional services related to such construction and services for the development of baseball park facilities are awarded to minority businesses and at least 5% of the aggregate dollar value of such contracts are awarded to women's businesses. The district is also required to hire a person to monitor the district's and DOA's compliance with minority contracting goals.

Finances

The bill permits a local professional baseball park district to invest its moneys in any investment it considers appropriate. Under the bill, a district is permitted to invest its moneys in the local government pooled-investment fund, which is managed by the state investment board.

Open meetings and records, audits, ethics

Laws requiring, with certain exceptions, open meetings of governmental bodies and public access to public records apply to a district. The legislative audit bureau is permitted to audit the records of a district. Members of the board of directors of a district are subject to the statutory code of ethics for local public officials. The bill also creates additional standards of conduct applicable to district board members that are similar to the standards of conduct applicable to state public officials. The bill expressly prohibits district board members from accepting free or discounted admission to professional baseball games.

Other

Current law provides that, if a tenant who is required to construct improvements exceeding $50,000 at the tenant's own expense on land leased to the tenant under a lease with a term of 30 years or more defaults or breaches a condition of the lease, the landlord may commence an action to recover the property after a one-year redemption period free from all liens, claims or demands of the tenant in the same manner as a mortgage foreclosure except without a sale of the property. The bill creates an exception under that statute for leases to which a district is a party.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, 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:

AB1-engrossed, s. 1 Section 1. 13.94 (4) (a) 1. of the statutes is amended to read:

AB1-engrossed,6,13 13.94 (4) (a) 1. Every state department, board, examining board, affiliated credentialing board, commission, independent agency, council or office in the executive branch of state government; all bodies created by the legislature in the legislative or judicial branch of state government; any public body corporate and politic created by the legislature including specifically a professional baseball park district; every provider of medical assistance under ch. 49; technical college district boards; development zones designated under s. 560.71; every county department under s. 51.42 or 51.437; every nonprofit corporation or cooperative to which moneys are specifically appropriated by state law; and every corporation, institution, association or other organization which receives more than 50% of its annual budget from appropriations made by state law, including subgrantee or subcontractor recipients of such funds.

AB1-engrossed, s. 2 Section 2. 13.94 (10) of the statutes is created to read:

AB1-engrossed,6,20 13.94 (10) Financial status of local professional baseball park districts. As promptly as possible following the end of each state fiscal biennium in which there are outstanding bonds or notes issued by a local professional baseball park district created under subch. III of ch. 229 that are subject to s. 229.74 (7), the legislative audit bureau shall submit a report to the cochairpersons of the joint committee on finance concerning the financial status of that district.

AB1-engrossed, s. 3 Section 3. 16.70 (14) of the statutes is amended to read:

AB1-engrossed,7,2 16.70 (14) "State" does not include a district created under subch. II or III of ch. 229.

AB1-engrossed, s. 4 Section 4. 16.82 (6) of the statutes is created to read:

AB1-engrossed,7,10 16.82 (6) May provide any services to a local professional baseball park district created under subch. III of ch. 229, for compensation to be agreed upon between the department and the district, if the district has entered into a lease agreement with the department under sub. (7), except that the department shall not act as a general contractor for any construction work undertaken by the district. No order or contract to provide any such services is subject to s. 16.705, 16.75 (1) to (5) and (8) to (10), 16.752, 16.754 or 16.765.

AB1-engrossed, s. 5 Section 5. 16.82 (7) of the statutes is created to read:

AB1-engrossed,7,16 16.82 (7) May enter into a lease agreement with a local professional baseball park district created under subch. III of ch. 229 for the lease of land or other property granted to the state and especially dedicated by the grant to use for a professional baseball park. The lease agreement may be for such rental payments and for such term as the secretary determines.

AB1-engrossed, s. 6 Section 6. 16.854 of the statutes is created to read: