Senate Counsel, Research
and Fiscal Analysis
Minnesota Senate Bldg.
95 University Avenue W. Suite 3300
St. Paul, MN 55155
(651) 296-4791
Tom Bottern
Director
   Senate   
State of Minnesota
 
 
 
 
 
S.F. No. 2391 - Vikings Stadium
 
Author: Senator Julie A. Rosen
 
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Nora Pollock, Senate Counsel (651/297-8066)
Alexis C. Stangl, Senate Counsel (651/296-4397)
 
Date: March 13, 2012



 

ARTICLE 1.  MINNESOTA STADIUM AUTHORITY

Sections 1 [Financial audits]and 2 [Minnesota Stadium Authority] provide that the Minnesota Stadium Authority (“Authority”) shall be audited by the legislative auditor. The Authority must pay the state for the total cost and expenses of an audit by the legislative auditor.

Section 3 [Public official] includes members or the chief executive of the Authority in the definition of “public official” for purposes of campaign finance and public disclosure laws.

Section 4 [Building materials; football stadium] exempts materials and supplies used or consumed in the construction or improvement of the stadium and its infrastructure from general sales and use tax. Expiration of the tax exemption is provided. This section is effective the day following final enactment.

Section 5 [Cities] allows a city to issue an on-sale intoxicating liquor license to sports facilities, restaurants, clubs, or bars located on land owned or leased by the Authority.

Section 6 [Employees] of the Minnesota Stadium Authority are included in the Minnesota State Retirement System.

Section 7 [Purpose] states the purpose of the new chapter relating to the stadium is to provide for the construction, financing, and long-term use of a stadium and related infrastructure as a venue for professional football and a broad range of other activities. The expenditure of public money and property acquired for the stadium are declared to serve a public purpose. Because of the unique public purpose of the stadium and the related contracts, the courts are charged with protecting those benefits, if necessary, by the use of specific performance and injunctive relief.

Section 8 [Definitions] provides definitions for the bill.

Section 9 [Stadium Authority], subdivision 1 establishes the Minnesota Stadium Authority as a public body and political subdivision of the state.

Subdivision 2 provides that the Authority consists of five members. The chair and two members are appointed by the Governor. The chair serves at the pleasure of the governor.  The mayor of Minneapolis appoints the other two members; members are not required to live in the city and may be appointed officials of a political subdivision. All members serve staggered terms.

Subdivision 3 allows the Authority to compensate its members, other than the chair, according to the laws governing administrative boards and agencies. The chair shall receive a fixed salary.

Subdivision 4 requires the chair to preside at all meetings and perform all other assigned duties and functions. The Authority may appoint a vice-chair and other necessary officers.

Subdivision 5 provides that a member, other than the chair, may only be removed by the appointing Authority for misfeasance, malfeasance, or nonfeasance.

Subdivision 6 requires the Authority to adopt bylaws to establish the rules of procedure, the powers and duties of its officers, and other matters related to the governance of the Authority.

Subdivision 7 requires the legislative auditor to audit the books and accounts of the Authority annually. The Authority shall pay the cost of the audit.

Subdivision 8 allows the Authority to appoint an executive director to serve as its chief executive officer. The executive director has the authority and duties prescribed by law and the Authority.

Subdivision 9 requires the Authority to establish a Web site to provide information to the public about actions taken by the Authority.

Subdivision 10 provides that any three members of the Authority constitute a quorum. During the design and construction stages of the stadium, a four-fifths vote of the Authority is required for specified decisions.

Section 10 [Location] requires the stadium to be constructed at the current stadium site in Minneapolis.

Section 11 [Powers; duties of the Authority].  Subdivision 1 allows the Authority to sue and be sued. The Authority is a public body and the stadium and related infrastructure are public improvements for specified purposes. The Authority is a municipality for stated purposes.

Subdivision 2 allows the Authority to acquire all necessary right, title, and interests to necessary property. The Authority may acquire land by condemnation.

Subdivision 3 allows the Authority to sell, lease, or otherwise dispose of property that is no longer needed. The property may be sold after notice and a hearing when practical. The Authority cannot sell or transfer title to the stadium unless authorized by the Legislature.

Subdivision 4 subjects the Authority to the open meeting statutes and the Minnesota Government Data Practices Act.

Subdivision 5 allows the Authority to operate the stadium and related infrastructures and facilities. The Authority may delegate the Authority to operate the stadium to the NFL team or other party.

Subdivision 6 allows the Authority to employ persons and contract for services. The Authority must enter into an agreement with the city regarding traffic control for the stadium.

Subdivision 7 allows the Authority to accept money, property, services, and grants or loans from another governmental entity or any person. The Authority must use the money, property, or services according to the terms of any contribution, grant, loan, or agreement.

Subdivision 8 allows the Authority to enter into use agreements or leases for the use, occupation, and availability of all, or part, of the Authority’s property for specified purposes. The Authority may charge and collect rents and fees. The agreement may provide that the other contracting party has exclusive use and the right to retain some or all revenues derived from the use. The lease or use agreement with an NFL team must require the NFL team to pay an agreed-upon portion of operating and maintenance costs and expenses. No lease or use agreement may permit smoking in the stadium.

Subdivision 9 allows the Authority to conduct research, prepare reports, and conduct all necessary hearings and investigations in connection with its functions.

Subdivision 10 authorizes the Authority to require an employee to obtain and file a bond or fidelity insurance policy. The Authority may obtain insurance to protect itself against liability.

Subdivision 11 exempts the acquisition and betterment of a stadium and its infrastructure from Metropolitan Council review and the Business Subsidy Act. The Met Council must waive any sewer access charges or similar fees.

Subdivision 12 gives the Authority all other powers necessary or incidental to the powers expressly granted.

Subdivision 13 requires the Commissioner of Management and Budget to make grants to the Authority in amounts equal to the amount deposited in the general fund under Article 4, section 1, subdivision 3, paragraph (b), clauses (2) and (3).

Section 12 [Stadium design and construction]. Subdivision 1 establishes that unless the Authority and NFL team agree otherwise, those parties shall establish a process to reach consensus on key elements of stadium design, development, and construction, including the creation of a group to manage the design and oversee construction of the stadium, and administration agreement between the team and Authority will establish minimum design standards and the rights and responsibilities of the Authority, team, the design and construction group, and the team owner’s representative for design and construction. 

The Authority may authorize the team to oversee construction of the stadium, in which case the team assumes the role and responsibility of the Authority for completing construction according to the agreed-upon minimum design standards. 

Subdivision 2 provides that, unless otherwise agreed, a party that requests a change in minimum design standards that increases costs must pay for the associated cost overruns or associated liabilities.

Subdivision 3 requires the stadium and related infrastructure be designed and constructed to incorporate the following general program and design elements: 1) the stadium will be approximately 1,500,000 square feet with approximately 65,000 seats (expandable to 72,000), 150 suites, and 7,500 club seats; 2) space for NFL team-related exhibitions and sales, including the NFL team museum and Hall of Fame, retail venues, and concessions and restaurants;  3) year-round space for the NFL team administrative operations, sales, and marketing; 4) space for administrative offices of the Authority; 5) 2,000 parking spaces within one block of the stadium and 500 parking spaces within 2 blocks; 6) elements sufficient to provide community and civic uses; 7) a roof that is fixed or retractable.

Subdivision 4 allows the Authority to accept financial obligations relating to cost overruns associated with acquisition of the stadium site, infrastructure, design, development, and construction, except that the Authority must not accept responsibility for cost overruns if the Authority has authorized the NFL team to manage the construction of the stadium. Cost savings or additional funds may be used first to fund additional stadium or infrastructure, and then to fund the capital reserves.

Section 13 [Commemorative bricks] requires the Authority to sell commemorative bricks to be prominently displayed at the stadium. The purchase of a brick is tax deductible. Funds raised by this section are appropriated to the Commissioner of Management and Budget for a grant to the Authority. This section is effective the day following final enactment.

Section 14 [Employment], subdivision 1 requires the Authority to make every effort to employ a construction manager, subcontractors, vendors, and concessionaires to employ women and members of minority communities when hiring. Goals for construction contracts to be awarded to women and minority-owned business will be a percentage at least equal to the minimum used for Minneapolis development projects.

Subdivision 2 requires the NFL team or the Authority to give workers presently employed by the NFL team or the Minnesota Sports Facilities Commission or its vendors at the existing football stadium the opportunity to continue their employment in comparable positions at the new stadium. Workers represented under a collective bargaining agreement may continue the same representation or designate another collective bargaining unit as their representative.

Section 15, [Stadium operations; capital improvements].  Subdivision 1 requires the stadium to be operated in a first-class manner. The Authority and the team must mutually agree on a third-party management company or individual to manage the stadium and on major vendors to the stadium. The Authority, with approval from the NFL team, may enter into agreements with a program manager for management of the stadium, for a maximum of 30 years.

Subdivision 2 requires the Authority to pay all operating expenses of the stadium.

Subdivision 3 requires the Authority to work to maximize access for public and amateur sports, community, and civic events, and other public events similar to those being held in the existing stadium. 

Subdivision 5 requires the NFL team to pay all game day expenses in the stadium, in addition to operating expense contributions.

Subdivision 6 requires the Authority to cooperate with the NFL team to facilitate the financing of the NFL team’s contribution, but the Authority is not required to incur additional costs or provide conduit financing.

Section 16 [Criteria and conditions].  Subdivision 1 requires the Authority to follow and enforce the specified criteria and conditions in developing the stadium and entering into contracts.

Subdivision 2. NFL team/private contribution; timing of expenditures.

Subdivision 3 requires the Authority to enter into a long-term lease or use agreement with the NFL team for the team’s use of the stadium. The lease or use agreement must be for 30 years, with the option to extend the length. The NFL team must agree to play all regularly scheduled and postseason home games at the stadium, except as otherwise agreed. Training facilities must remain in the state during the term of lease or use agreement. The lease or use agreement must include terms for default, termination, and breach of the agreement. The lease or use agreement must provide for specific performance and injunctive relief. The NFL team must not enter into or accept any agreement or requirement inconsistent with this 30 year commitment. Parameters are set for a lease or use agreement that includes a specific performance clause.

Subdivision 4 requires that a lease or use agreement to include rent and other fees and expenses to be paid by the NFL team. The NFL shall receive all game day revenues. The NFL retains naming rights to the stadium, subject to approval of the name by the Authority. The Authority receives all general ticket revenues and other event revenues other than from NFL games, NFL team owned major league soccer games, and other NFL team events agreed to by the Authority.

Subdivision 5 requires that during the 30 year lease or use agreement term, the NFL team must give written notice to the Authority more than 180 days prior to any action that would result in a breach or default of a provision of the lease or use agreement. The Authority or the state may seek enforcement of the lease or use agreement.

Subdivision 6 requires the Authority to determine, before construction begins, that all public and private funding sources are included in written agreements. The NFL team must provide the Authority access to its financial or other information to help the Authority make the determination.

Subdivision 7 requires the Authority to generally comply with all environmental requirements imposed by regulatory agencies for the stadium, site, and structure.

Subdivision 8 provides that if the NFL team is sold, a portion of the sales price must be paid to the Authority and deposited in a reserve fund for improvements to the stadium.

Subdivision 9 requires the Authority and the NFL team to agree to a notice provision for a material breach. In the event of a material breach by the NFL team, the lease or use agreement must provide the Authority access to audited financial statements of the NFL team and other necessary financial information to enforce the terms of the lease or use agreement.

Subdivision 10 requires the lease or use agreement to include a provision that the NFL team or NFL will transfer to the state the Vikings’ heritage and records if the NFL team is in violation of the lease or use agreement.

Subdivision 11 provides that the Authority and NFL team will strive to build a stadium that is environmentally and energy efficient and to attempt to receive Leadership in Energy and Environmental Design (LEED) certification. The Authority and NFL team will strive to make the stadium design architecturally significant. As much as possible, the Authority and team must ensure that the stadium be constructed of American-made steel.

Subdivision 12 requires the Authority and NFL team to secure any necessary approvals to the terms of the lease or use agreement and the design and construction plans for the stadium, including prior approval of the NFL.

Subdivision 13 requires the lease or use agreement to provide for affordable tickets to professional sporting events held in the stadium.

Subdivision 14 requires the Authority to own and retain the exclusive right to sell the stadium builder’s licenses in the stadium. The Authority will retain the NFL team to act as the Authority’s agent in the marketing and selling of such licenses.

Subdivision 15 requires the Authority to, for 5 years after the first NFL home game in the stadium, grant the NFL team the exclusive right to establish major league soccer at the stadium. The Authority and the NFL team may enter into an agreement providing the terms and conditions of such an arrangement provided certain requirements are met.

Subdivision 16 provides that, subject to prior approval of the Authority, any obligations by the NFL team may be performed by the team, a related entity, a third party, or other specified entities.

Section 17 [Municipal activities].  Subdivision 1 allows Minneapolis to acquire property interests in the development area for the stadium site and stadium infrastructure. The city may convey the property to the Authority with or without consideration. The city may prepare a site for development as a stadium and acquire and construct any stadium-related infrastructure.

Subdivision 2 provides that the city has no interest in or claim to any assets or revenues of the Authority, unless otherwise agreed.

Subdivision 3 names the Authority as the responsible governmental unit (“RGU”) for an environmental impact statement (“EIS”), if one is necessary. An EIS shall not be required to consider alternative stadium sites. The EIS must be determined to be adequate before commencing work on the foundation of the stadium.

Subdivision 4 allows the city to make expenditures or grants for purposes of this bill. The city may reimburse any entity that has granted, loaned, or advanced funds to the city.

Subdivision 5 expresses the Legislature’s intent that the city may acquire and develop stadium infrastructure, enter into contracts with the Authority and other governmental or nongovernmental entities, appropriate funds, and make employees, consultants, and other revenues available for those purposes.

Subdivision 6 finds it necessary to establish an alternative process for municipal land use and development review to accomplish the objectives of the act in the required time frame. The legislature finds and declares that the construction of a stadium within the development area is consistent with the adopted area plan, is the preferred stadium location, and is a permitted land use. The city must establish a stadium implementation committee to make recommendations on the design plans submitted for the stadium and related infrastructure and improvements. The recommendations are forwarded to the Minneapolis Planning Commission for an advisory recommendation, and then to the city council for final action. A timeline for action is provided. The city council must not impose unreasonable conditions on the recommendations of the implementation committee nor impose any conditions or take any actions that will result in a delay of the planning and construction timetable or in additional overall costs. Failure of the city to act within the specified time is deemed to be approval. The Authority may seek a review of city council actions in district court.

Section 18  [Property tax exemption; special assessments] provides that any property owned or used by the Authority is acquired and used for a public purpose.  The stadium is exempt from property taxes.  The stadium is subject to special assessments.

Section 19 [Liquor licenses] allows a city to issue intoxicating liquor licenses for the premises of the stadium site. These licenses are in addition to the number authorized by law.

Section 20 [Local taxes] prohibits new or additional local sales or use taxes from being imposed on sales at the stadium or ticket sales, unless the tax is applicable throughout the taxing jurisdiction.

Section 21 [Metropolitan Sports Facilities Commission] abolishes the Metropolitan Sports Facilities Commission (“Commission”). Subdivision 1 requires the Commission to pay the operating expenses of the Authority until the commission is abolished.     

Subdivision 2 requires the Commission to pay its outstanding obligations, settle its accounts, and transfer its remaining assets, liabilities, and obligations to the Authority.

Subdivision 3 abolishes the Commission once the transfer in subdivision 2 is complete.

Subdivision 4 requires that all Commission employees be transferred to the Authority without loss of right or privilege.

Section 22 provides that this article is effective the day following final enactment unless otherwise provided.

ARTICLE 2.  STATE STADIUM FUNDING

Section 1. Stadium Appropriation Bonds.  Subdivision 1.  Defines an appropriation bond as an instrument of the state payable from money appropriated by law from the general fund from revenues generated from the Minneapolis Convention Center Tax or electronic pull-tabs and linked bingo for debt service on the bonds issued under subdivision 2; bond proceeds as described in subdivision 2; payments made under agreements or arrangements under subdivision 2; or investment earnings from the above sources. 

Defines debt service as the amount payable of principal, premium, and interest on appropriation bonds.

Subdivision 2.  Paragraph (a) authorizes the Commissioner of Management and Budget to sell and issue appropriation bonds of the state for the public purpose of financing the stadium project of the Minnesota Stadium Authority as provided by chapter 473J.  Requires that bond proceeds and any net income from investment of the proceeds be appropriated to the bond proceeds fund in the state treasury.

Paragraph (b) authorizes the Commissioner to sell appropriation bonds to net $548 million provided that the bonds issued and unpaid not exceed $650 million.

Paragraph (c) allows the Commissioner the authority to issue a series of one or more bonds up to the amounts in paragraph (b).  Limits the term on any series of appropriation bonds to 30 years.  Allows taxable or tax-exempt bond to be issued.

Paragraph (d) authorizes the Commissioner to enter into certain agreements relating to the bonds.

Paragraph (e) allows the Commissioner to enter into agreements or contracts relating to the disclosure of information consistent with federal rules and regulations.

Paragraph (f) provides that the bonds are not subject to Chapter 16C (State Procurement).

Subdivision 3 requires that the bonds issued in a manner consistent with state law or this section.  Requires that the bond state that the full faith and credit of the state is not pledged.  Allows the bonds to be sold at either public or private sale, bear interest at a fixed or variable rate, and be fully negotiable.

Subdivision 4 authorizes the Commissioner to issue refunding bonds and provides for use of the proceeds of refunding bonds.

Subdivision 5 authorizes specified entities to legally invest funds in any appropriation bond.

Subdivision 6 provides that the appropriation bonds are not public debt of the state and the full faith, credit, and taxing powers of the state are not pledged to the payment of the appropriation bonds or to any payment the state agrees to make under this section.  Provides that the appropriation bonds are not obligations paid directly from a tax of statewide application.  Provides that the appropriation bonds be payable from an amount the Legislature appropriated for debt service; however, nothing in this section shall require the state to appropriate funds sufficient to make debt service payments on the appropriation bonds.  Provides a mechanism to cancel the bonds in the event the Legislature does not provide sufficient amounts for debt service.

Subdivision 7 requires that the proceeds of the appropriation bonds and interest be credited to the special appropriation stadium bond proceeds fund and be appropriated to the Commissioner of Management and Budget for payment of capital expenses, debt service on outstanding indebtedness of the state, operating and capital reserves of the authority, the funding of debt service reserves for the appropriation bonds, and nonsalary expenses incurred in conjunction with the sale of the bonds.  Allows the proceeds to be provided to the authority for use on the stadium project under chapter 473J.

Subdivision 8, paragraph (a) requires that the Commissioner of Management and Budget, in consultation with the Commissioner of Revenue, determine the increase in revenues received from taxes imposed on charitable gambling over those estimated in the February forecast for that fiscal year by March 15 each year.  Sets the February 2012 revenue forecast as the baseline for fiscal year 2015, instead of using the current year revenue forecast for that year only.  Requires that the calculations be made net of estimated refunds of the taxes required to be paid.

Paragraph (b) sets the amount of revenue for paying the debt service on the appropriation bonds equal to the increase in revenues as calculated under paragraph (a) less the following:

  1. Appropriations to principal and interest on appropriation bonds ;
  2. Appropriations for payments to the operating reserve;
  3. Appropriations for payments to the capital reserve;
  4. Appropriations for the Gambling Control Board administration for fiscal years 2012 and 2013 only;
  5. General fund cost of the sales tax exemption for the building materials used in stadium construction;
  6. Reimbursement of cash deposits into the construction fund; and
  7. Payments of compulsive gambling appropriations.

Paragraph (c) provides that any additional revenues not expended under paragraph (b) be allocated for the uses identified in paragraph (b) or for payment of gambling tax rebates or reductions.

Paragraph (d) limits the applicability of this subdivision until after the issuance of the appropriation bonds.

Subdivision 9, paragraph (a) appropriates the amount needed to pay principal and interest on appropriation bonds issued under this section each year from the general fund to the Commissioner for deposit into the bond payments accounts.  Makes the appropriation subject to repeal, unallotment, or cancellation as provided for in subdivision 6.

Paragraph (b) allows the Commissioner the authority to deposit additional revenues, after the provisions of subdivision 8, paragraph (b) have been satisfied, in any debt service reserve account established with respect to the appropriation bonds.  For any amounts not required for a debt service reserve account, allows the Commissioner the authority to deposit to any general reserve account establish for application against any shortfall in the Minneapolis Convention Center tax revenue under Article 4.

Subdivision 10 waives the state’s immunity from lawsuits involving the appropriation bonds or ancillary contracts entered into by the Commissioner of Management and Budget.

Subdivision 11 establishes a procedure for validating the issuance of these appropriation bonds.  This process is patterned after the process used for the state’s issuance of appropriation bonds related to tobacco settlements (Laws 2011, Chapter 7, Article 11, Section 4, Subdivision 9).  The Commissioner of Management and Budget must take action providing for the issuance of the appropriation bonds and must then file a complaint that would set out the state’s authority to issue the bonds, the action, or proceeding authorizing the issuance and its adoption and all other proceedings. The Supreme Court must issue an order allowing all persons and the state through the Attorney General to appear before the Court and show why the complaint should not be granted and the proceedings and bonds validated.  The Court must provide notice in a specified manner and those with an interest may become a party to the suit against the state. The Court must then determine whether or not the bonds would be validated.  Bond shall be labeled to identify them as subject to the validation judgment.  A certified copy of the judgment shall be received as evidence in state courts.  Costs of the validation procedure shall be paid by the state, except that equitable costs may be charged to a person who contests the action or intervenes.  A justice is not disqualified in a validation action based on being a landowner or taxpayer.

Section 2 [Appropriation] appropriates $6,000,000 annually from the general fund to the Commissioner of Management and Budget for a grant to the Minnesota Stadium Authority to pay operating costs.  This section appropriates $1,500,000 annually from the general fund to the Commissioner of Management and Budget for a grant to the Minnesota Stadium Authority to pay capital costs.  These annual appropriations are subject to an annual adjustment between zero and five percent set forth in Article 1, Section 8, Subdivision 2.  If state appropriation bonds have not been issued, amounts not to exceed the increased revenues from the expansion of lawful gambling are appropriated to the Commissioner of Management and Budget to make grants to the Minnesota Stadium Authority for stadium costs, including land acquisition and construction.

This section prevents the use of this validation process if comparable appropriation bonds have already been judicially determined to be valid; that is, if the tobacco bonds are approved in a validation process, then the stadium appropriation bonds shall not go through the validation process.

The bill establishes a process for validation of the appropriation bonds by the Minnesota Supreme Court.

ARTICLE 3.  CONFORMING CHANGES.

Sections 1 to 6 strike obsolete references to the Metropolitan Sports Facilities Commission (MSFC), which is abolished in Article 1.

Section 7 provides that employees of the former MSFC are members of the Minnesota State Retirement System with respect to service rendered on or after May 17, 1977.

Section 8 repeals obsolete sections of Minnesota Statutes, chapter 473, pertaining to the MSFC.

ARTICLE 4.  MINNEAPOLIS CONVENTION CENTER

Section 1 [Sales and use tax], subdivision 1 amends Minnesota Laws pertaining to the Minneapolis Convention Center.  It provides that the Minneapolis sales tax, allowed up to one half of one percent, does not apply to liquor sales, and excludes advertising and packing materials from items subject to the Minneapolis sales tax.  The tax is extended through 2046 and may be adjusted, up to the allowable rate, provided that its proceeds produce sufficient revenue to pay stadium costs outlined in subdivisions 3 and 4.

Subdivision 2 provides that the Commissioner of Revenue may charge a reasonable fee for its collection of the Minneapolis sales taxes. 

Subdivision 3 directs the Commissioner of Revenue to apply the proceeds of the Minneapolis sales taxes to the costs of collecting and administering the taxes and any refunds due to taxpayers.  The Commissioner then must retain for the general fund:

  • Periodic amounts beginning in 2021 and so that not later than 2046, the state bond debt service present value of $150 million is restored to the general fund;
  • Beginning in 2021, an amount equal to $1.5 million per year, which has been adjusted annually since 2016, for a capital improvement reserve appropriation;
  • Beginning in 2021, an amount equal to $6 million per year, which has been adjusted annually since 2016 for an operating expense appropriation;
  • Beginning in 2021, periodic amounts for recapture of the present value of the state’s advances of the City of Minneapolis’ share of capital improvements and operating expenses for 2016 through 2020; and
  • Beginning in 2013, amounts of excess local sales tax revenue over and above the benchmark scheduled amounts, for the benefit of the stadium Authority.

Sets the state’s annual adjustment factor at the annual increase in Minneapolis sales taxes received, limited to between zero and five percent.

After retention of the tax proceeds as required above, remaining revenues must be remitted to the city and may be used to fund projects as provided in subdivision 4.

Subdivision 4 allows revenues from Minneapolis local sales tax to be used to fund capital projects or for other economic development, provided that the city may first direct such revenue to convention center debt, operations, capital improvements, and marketing.

Section 2 [Liquor, lodging and restaurant taxes] amends the liquor, lodging, and restaurant tax provisions in Minneapolis Laws.  It clarifies that the maximum three percent sales tax on liquor sales is imposed when liquor is sold at licensed on-sale liquor establishments and stores located in the downtown taxing area, and that the maximum three percent lodging sales tax is imposed on sales of lodging for less than 30 days at a hotel, motel, rooming house, tourist court, or trailer camp located within the city.  The taxes authorized under this section are imposed until January 1, 2047, and may be adjusted so that the rates imposed, together with the general local sales tax in section 1, subdivision 4, are sufficient to finance the payments required under section 1, subdivision 3.  These taxes are subject to the same interest penalties and enforcement provisions as other state general sales tax laws.

Section 3 [Charter limitations] provides that any amounts expended or indebtedness or obligations incurred resulting from proceeds of the Minneapolis liquor, lodging and restaurant taxes are not city expenditures under this article within the meaning any city charter provision.

Section 4 [Effective date] states that this article is effective the day after the Minneapolis City Council approves its provisions and its chief clerical officer certifies such approval to the secretary of state.

Section 5 [Severability ] provides that if any section of this article is found to be invalid, it is severable from other provisions in the article, which will remain in effect.

Section 6 [Local sales tax requirements] states that the changes in this article to the Minneapolis local sales tax and the Minneapolis local liquor, lodging and restaurant taxes are not subject to provisions of sales tax law requiring a local governing body resolution and referendum before the Legislative approval.

ARTICLE 5.  LAWFUL GAMBLING

Section 1 [Bar operation] changes the definition of “bar operation” to remove a limitation to premises where sales of gambling equipment be made from a common area where food and beverages are also sold.

Section 2 [Bar bingo] excludes bingo games linked to other permitted premises from the definition of “bar bingo.”

Section 3 [Bingo occasion] modifies the definition of “bingo occasion”.  Linked bingo games played on electronic bingo devices may be played during regular business hours and all play during this period is a bingo occasion for reporting purposes.  For premises where bingo is the primary business, regular business hours are between 8:00 a.m. and 2:00 a.m.

Section 4 [Booth operation] modifies the definition of “booth operation” to remove a limitation to premises where disposable gambling equipment is sold and redeemed from a separate enclosure distinct from areas where food and beverages are sold.

Section 5 [Electronic bingo device] modifies the definition of “electronic bingo device,” permitting an electronic bingo devices to be activated by insertion of coin, currency, or tokens.

Section 6 [Electronic pull-tab device] adds a definition for “electronic pull-tab device.”  An electronic pull-tab device means  a device that:

(a) is used to play one or more electronic pull-tab games;

(b) requires a coded entry to activate play but does not allow use of coin, currency, or tokens to be inserted to activate play;

(c) allows a player the option to activate the opening of:

(1) all tabs of a ticket at the same time; or

(2) each tab of a ticket separately;

(d) records and maintains information pertaining to accumulated win credits that may be applied to games in play or redeemed upon termination of play;

(e) has no spinning symbols or other representations that mimic a video slot machine;

(f) has no additional function as a gambling device;

(g) may incorporate an amusement game feature as part of the pull-tab game but may not require additional consideration for that feature or contain or award any points, prizes or other benefit for that feature;

(h) may have auditory or visual enhancements to promote or provide information about the game being played, provided the component does not affect the outcome of a game or display the results of a game;

(i) maintains, or nonresettable meters, a printable, permanent record of all transactions involving each device and electronic pull-tab games played on the device; and

(j) is not a pull-tab dispensing device as defined elsewhere in statute.

Section 7 [Electronic pull-tab game] defines an “electronic pull-tab game” to mean a game containing:

(a) facsimiles of pull-tab tickets that are played on an electronic pull-tab device;

(b) a predetermined finite number of winning and losing tickets;

(c) the same price for each ticket in the game;

(d) a price paid by the player of not less than 25 cents per ticket;

(e) tickets that are in conformance with applicable board rules for pull-tabs;

(f) winning tickets that comply with certain prize limits;

(g) a unique serial number that may not be regenerated;

(h) an electronic flare that displays the game name, form number, predetermined finite number of tickets in the game, and prize tier; and

(i) no spinning symbols or other representations that mimic a video slot machine.

Section 8 [Electronic pull-tab game system] defines “electronic pull-tab game system” as the equipment to conduct, manage, and record electronic pull-tab games, and to report and transmit the game results to the Department of Revenue.  The system must provide security and access levels sufficient so that internal control objectives are met as prescribed by the Gambling Control Board.  The system must contain a point of sale station.

Section 9 [Gambling equipment] modifies the definition of “gambling equipment” to divide it into categories of “disposable” or “permanent”, listing equipment that is included in each category.  The revised definition includes all items that were previously deemed “gambling equipment” and adds “electronic pull-tabs (under “disposable gambling equipment”) and “electronic pull-tab devices” (under “permanent gambling equipment”)

Section 10 [Linked bingo game provider] modifies the definition of “linked bingo game provider” to include any person who provides the means to link bingo games. 

Section 11 [Linked bingo game system] modifies the definition of “linked bingo game system”.  For linked electronic bingo games, the system includes electronic bingo devices.

Section 12 [Linked bingo prize pool] modifies the definition of “linked bingo prize pool” to carry a prize pool from one game to another in a progressive linked bingo game.

Section 13 [Paddle wheel] modifies the definition of “paddle wheel” to include an electronic device that simulates a paddle wheel to determine a winning number matching a paddle ticket.

Section 14 [Promotional ticket] limits the definition of promotional tickets to pull-tab and tipboard tickets that are paper.

Section 15 [Pull-tab] expands the definition of “pull-tab” to include a facsimile of a paper pull-tab ticket used in conjunction with an electronic pull-tab device.

Section 16 [Lawful Gambling] excludes electronic bingo devices and electronic pull-tab devices from the definition of gambling device for purposes of certain chapters of the criminal and tax codes.  This section specifies that an electronic game device allowed for lawful gambling may not be a slot machine.  Electronic game devices, including but not limited to electronic bingo devices, electronic paddle wheels, and electronic pull-tab devices may only be used in the conduct of lawful gambling and may not display or simulate any other form of gambling or entertainment, except as otherwise provided in chapter 349.

Section 17 [Pull-tab sales from dispensing devices] deletes certain requirements governing rules that regulate the use of pull-tab dispensing devices.

Section 18 [Electronic bingo devices] deletes certain requirements governing rules that regulate the use of electronic bingo devices. This section gives the Gambling Control Board authority to require deactivation of an electronic bingo device for violation of a law or rule and to implement any other controls to ensure and maintain the integrity of electronic bingo devices and the electronic bingo games played on the devices.

Section 19 [Electronic pull-tab devices and electronic pull-tab game system] authorizes the Gambling Control Board to adopt rules to ensure the integrity of electronic pull-tab devices, the electronic pull-tab games played on the devices, and the electronic pull-tab game system necessary to operate them.  The Board may not require an organization to use electronic pull-tab devices.  This section requires the Board to examine electronic pull-tab devices before authorizing their lease or sale.  The Board is authorized to contract for examination of game systems and electronic pull-tab devices and is permitted to require a working model  for testing, examination and analysis.  A system must be approved by the Board before its use and must have the capability to permit the Board to electronically monitor its operation and internal accounting systems.  The Board is permitted to require a manufacturer to submit a certificate, with certain statements, from an independent testing lab that is approved by the Board to perform testing services. The Board may require deactivation of an electronic pull-tab device for violation of law or rule and to implement integrity controls.

Section 20 [Prohibited acts; licenses required] allows a linked bingo game provider to provide electronic bingo devices for linked electronic bingo games without having obtained a distributor license.  This section precludes a distributor or distributor salesperson from also being licensed as a linked bingo game provider.

Section 21 [Prohibition] expands certain prohibitions in current law on actions of distributors, distributor salespersons, or representatives of a distributor to apply when gambling equipment is leased.  This section modifies certain other prohibitions to apply to paper pull-tab games or deals.

Section 22 [Sales from facilities] expands certain requirements for gambling equipment to leased equipment.  This section requires a distributor and a manufacturer to notify the Gambling Control Board of the method it will use to sell and transfer electronic pull-tab games to licensed organization or distributors, and must receive approval of the Board before implementing or making changes to the approved method. 

Section 23 [License required] permits a manufacturer of gambling equipment to also be licensed as a linked bingo game provider.

Section 24 [Paper pull-tab and tipboard flares] amends current requirements for pull-tabs and tipboards to apply to paper pull-tabs and tipboards.

Section 25 [Samples of gambling equipment] requires a manufacturer of gambling equipment  to submit to the Board the applicable version of software necessary to operate electronic devices and related systems for testing of software and software upgrades.

Section 26 [License application] allows the Board to issue a license to a manufacturer of gambling equipment.

Section 27 [Attachments to application] limits the fees a linked bingo game provider may charge for the cost of providing services and equipment to organizations licensed to conduct linked bingo.

Section 28 [Linked bingo game services requirement] sets certain requirements for linked bingo game providers and distributors.

Section 29 [Conduct of bingo] requires that the price of a face played on an electronic bingo device not be less than the price of a face on a bingo paper sheet sold for the same game at the same occasion.

Section 30 [Bar bingo] strikes the prohibition against paying rent for a bar bingo occasion.

Section 31 [Linked bingo games] strikes the limit on the number of linked bingo games a licensed organization may conduct.  This section adds a requirement that linked bingo games may only be conducted by licensed organizations who have an agreement with the linked bingo game provider.

Section 32 [Linked bingo games played exclusively on electronic bingo devices], Subdivision 9, sets requirements and limits for the play of electronic bingo devices.  The premises must be:  (1) licensed for on-sale or off-sale of intoxicating liquor of 3.2 percent malt beverages, but not including a general food store or drug store permitted to sell alcoholic beverages; or (2) a premises where bingo is conducted as the primary business and has a seating capacity of at least 100.  The number of electronic bingo devices is limited to six for premises with a seating capacity of 200; to 12 for a premises with a seating capacity greater than 200; and to 50 for a premises where bingo is the primary business.  Prior to a bingo occasion, a linked bingo game provider must provide to the Board a bingo program.  Before participating in the play of a linked bingo game, a player must present and register a valid picture identification card that includes the player’s address and date of birth.  An organization may remove from play a device that a player has not used in a specified period of time.  The organization must provide notice in its house rules.

Section 33 [Conduct of pull-tabs] applies Gambling Control Board rules for paper pull-tabs to electronic pull-tab games.

Subdivision 3 sets location restrictions and requirements for pull-tab dispensing devices.  Pull-tab dispensing machines may only be used at a permitted premises that is:  (1) a licensed premises for on-sale of intoxicating liquor or 3.2 percent malt beverages; (2) a premises where bingo is conducted as the primary business; or (3) an establishment licensed for the off-sale of intoxicating liquor, other than drug stores and general food stores.  The number of pull-tab dispensing devices located at any permitted premises is limited to three.

Subdivision 4 sets requirements and restrictions on electronic pull-tab devices.  Electronic pull-tab devices may only be used at a permitted premises: (1) that is licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent malt beverages, not including general food stores or drug store; or (2) that is a premises where bingo is conducted as the primary business and has a seating capacity of at least 100; and (3) where the sale of paper pull-tabs is conducted by the licensed organization.   The number of electronic pull-tab devices in play is limited to six for a premises with a seating capacity of 200 or less; to 12 for a premises with more than 200 seats; and to 50 for a premises where the primary businesses is bingo.  The hours of operation are limited to 8:00 a.m. to 2:00 a.m.  All electronic pull-tab games must be sold and played on permitted premises and may not be linked to other permitted premises.  Electronic  pull-tab games may not be transferred to any other location by the licensed organization.  Electronic pull-tab games may be commingled if the games are from the same family of games and manufacturer and contain certain similarities.  The organization may remove a device from play if a player does not use it for a specified time.  The organization must provide notice in its house rules.  Before playing an electronic pull-tab game, a player must present and register a valid picture identification card that includes the player’s address and date of birth.  A player may only use one device at a time.

Section 34 [Lease or ownership required; rent limitations] modifies and sets limits that an organization may pay for rent. 

Section 35 [Accounts] requires that gambling receipts from electronic pull-tab games and all linked electronic bingo games must be recorded daily and deposited into a gambling bank account within two business days.

Section 36 [Expenditures] modifies certain reporting requirements to an electronic format.

Section 37 [Reports] modifies certain reporting requirements.   This section eliminates a requirement that an organization report annually to its membership and eliminates requirements for reporting of allowable expenses, lawful purpose expenditures, the percentage of annual gross profits used for charitable contributions; and the percentage of annual gross profits used for all taxes and fees.

Section 38 [Pull-tab records] specifies that certain rules are applicable to paper pull-tabs.

Section 39 [Linked bingo prizes] sets a prize limit for linked bingo games played exclusively with electronic bingo devices.  An organization may not contribute more than 85 percent of the gross receipts per permitted premises to a linked bingo game prize pool.  This section modifies the condition under which a portion of gross receipts is carried over in a progressive linked bingo game.  This section deletes a calculation that reduces the annual limit for progressive bingo game prizes by the amount an organization contributes to progressive linked bingo games during the same year.  This section requires that prizes in excess of $599 be paid within three business days for linked bingo games played exclusively with electronic bingo devices.  Winners of prizes in excess of $599 for linked bingo will be given a receipt or claim voucher as proof of a win.

Section 40 [Appropriation] appropriates $450,000 in fiscal year 2012 and $779,000 in fiscal year 2013 to the Gambling Control Board for operating expenses related to the regulatory oversight of lawful gambling for electronic pull-tabs and electronic linked bingo.  One-half of one percent of the revenue deposited in the general fund for general obligation grant is appropriated to the Commissioner of Human Services for the compulsive gambling treatment program, and one-half of one percent of the revenue deposited in the general fund for general obligation grants is appropriated to the Gambling Control Board for a grant to the state affiliate of the National Council on Problem Gambling to increase public awareness of problem gambling, education and training for those providing treatment services, and research relating to problem gambling.

Section 41 [Effective date] makes this article effective the day following final enactment.

ARTICLE 6.  MISCELLANEOUS

Section 1 [Building materials; capital projects] allows a sales tax exemption for materials and supplies used or consumed in and equipment incorporated into the construction or improvement of capital improvement projects authorized in section 3.  Sales tax is paid upfront and then refunded.

Section 2 [Refund] includes the exemption for materials and supplies authorized in section 1 to the list of sales tax payments eligible for a refund.

Section 3 [Use of local tax revenues by cities of the first class] adds a provision allowing cities of the first class to use excess local sales tax revenues after projects authorized under a special law have been completed to fund capital projects with a total construction cost of at least $40 million.

Section 4 [Use of the Stadium] requires the Minnesota Vikings to make the stadium available for amateur sports activities for up to ten days per year during the time stadium bonds are outstanding.  The team may charge only out-of-pocket expenses for such use.  The team must make the stadium available, at no charge, for up to seven days per year for Minnesota State High School League activities for high school soccer and football tournaments.

 
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