AB438: Bill Text

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.

AB438,,4 The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB438,1 Section 1. 16.09 of the statutes is created to read:

AB438,,6 16.09 Grant to a local professional baseball park district. (1) Public purpose. The legislature finds and determines that baseball park facilities encourage economic development and tourism in this state, reduce unemployment in this state, preserve business activities within this state, generate additional tax revenues that would not exist without the baseball park facilities, and bring needed capital into this state for the benefit and welfare of people throughout the state. It is therefore in the public interest and serves a statewide public purpose, and it is the public policy of this state, to assist a local professional baseball park district created under subch. III of ch. 229 in the development, construction, improvement, repair, and maintenance of baseball park facilities.

AB438,,7 (2) Definitions. In this section:

AB438,,8 (a) “Baseball park facilities” has the meaning given in s. 229.65 (1).

AB438,,9 (b) “District” has the meaning given in s. 229.65 (5).

AB438,,10 (c) “Gap payment” means payment of the amount specified in sub. (3) (a), which is intended to substantially equal the total estimated taxes imposed under ch. 71 in calendar years 2021, 2022, and 2023 on the payroll of the professional baseball team and of visiting professional baseball franchises using the professional baseball park facilities.

AB438,,11 (d) “Professional baseball team” has the meaning given in s. 229.65 (6m).

AB438,,12 (3) Grant. Subject to sub. (4), the department shall award a grant to a district to assist in the development, construction, improvement, repair, and maintenance of baseball park facilities. The grant shall consist of the following:

AB438,,13 (a) The gap payment of $35,800,000 upon execution of the lease and nonrelocation agreements satisfying s. 229.6802.

AB438,,14 (b) The payment of $25,000,000 upon execution of the lease and nonrelocation agreements satisfying s. 229.6802. The district shall maintain the moneys paid under this paragraph in a separate account in the baseball park facilities improvement segregated fund established under s. 229.687 and may expend the moneys only for the purpose of winterizing the baseball park facilities.

AB438,,15 (c) Twenty-two consecutive annual payments beginning in 2024, subject to the following:

AB438,,16 1. The initial payment in 2024 shall equal $13,400,000.

AB438,,17 2. Except as provided in subd. 3., the amount of each subsequent annual payment shall increase from the initial payment at the rate of 4 percent per year compounded annually.

AB438,,18 3. No annual payment may exceed $20,000,000, and beginning on July 1, 2041, no annual payment may exceed $10,000,000.

AB438,,19 4. No annual payment may be made after expiration or termination of the lease specified in s. 229.6802 (1).

AB438,,20 (4) Contract requirements. The department may not award a grant under sub. (3) unless s. 229.6802 has been satisfied.

AB438,,21 (5) Loans to a local professional baseball park district. (a) Upon a majority vote of all current members appointed to the board of a district and eligible to vote on the matter, the department shall issue loans to the district to assist in the development, construction, improvement, repair, and maintenance of baseball park facilities. The department shall issue each loan in the amount approved by the board no later than 10 days after receipt of the board’s request for the loan. The department may not issue more than a total of $50,000,000 in loans under this paragraph.

AB438,,22 (b) Interest on each loan issued under par. (a) shall accrue monthly at a rate equal to the state investment fund earnings rate during the immediately preceding month, as certified by the secretary.

AB438,,23 (c) The district shall pay all interest accruing on each loan issued under par. (a) on a quarterly basis to the secretary for deposit in the general fund. The outstanding balance of each loan issued under par. (a) shall be paid no later than 15 years after the date of issuance or upon expiration or termination of the lease specified in s. 229.6802 (1), whichever is earlier.

AB438,,24 (d) At least quarterly, the department shall submit a report to the joint committee on finance specifying the outstanding principal and interest owed by the district on each loan issued under par. (a).

AB438,,25 (e) The department may not issue a loan under this subsection after December 31, 2045.

AB438,2 Section 2. 16.58 (3) of the statutes is amended to read:

AB438,,27 16.58 (3) The department may provide financial consulting services to a local exposition district created under subch. II of ch. 229 or a local professional baseball park district created under subch. III of ch. 229.

AB438,3 Section 3. 25.17 (1) (es) of the statutes is created to read:

AB438,,29 25.17 (1) (es) Funds of a local professional baseball park district created under subch. III of ch. 229 (s. 229.68 (9)), but subject to the terms of the contract under s. 229.68 (9);

AB438,4 Section 4. 77.54 (9a) (gm) of the statutes is created to read:

AB438,,31 77.54 (9a) (gm) A local professional baseball park district under subch. III of ch. 229.

AB438,5 Section 5. 77.54 (41) of the statutes is amended to read:

AB438,,33 77.54 (41) The sales price from the sale of building materials, supplies and equipment to; and the storage, use or other consumption of those kinds of property by; owners, contractors, subcontractors or builders if that property is acquired solely for or used solely in, the construction, improvement, renovation, repair, maintenance, or development of property that would be exempt under s. 70.11 (36).

AB438,6 Section 6. 77.705 of the statutes, as affected by 2023 Wisconsin Act 19, is repealed.

AB438,7 Section 7. 77.707 (1) of the statutes is amended to read:

AB438,,36 77.707 (1) Retailers and the department of revenue may not collect a tax under s. 77.705, 2021 stats., for any local professional baseball park district created under subch. III of ch. 229 after the last day of the fiscal quarter in which the local professional baseball park district board makes a certification to the department of revenue under s. 229.685 (2), 2021 stats., or after August 31, 2020, whichever is earlier, except that the department of revenue may collect from retailers taxes that accrued before the termination date and fees, interest and penalties that relate to those taxes. Except as provided under s. 77.60 (9), the department of revenue may not issue any assessment nor act on any claim for a refund or any claim for an adjustment under s. 77.585 after the end of the calendar year that is 4 years after the year in which a local professional baseball park district tax has terminated. The department of revenue shall estimate the amount of the refunds, including interest, that the department may need to pay during that 4-year period and retain that amount from the taxes collected for the district after the termination date. Any amount that remains after the payment of refunds shall be distributed to the counties based on the population of each county that is part of the district.

AB438,8 Section 8. 77.707 (1) of the statutes, as affected by 2023 Wisconsin Act .... (this act), is repealed.

AB438,9 Section 9. 77.707 (2) of the statutes is renumbered 77.707.

AB438,10 Section 10. 77.71 (intro.), (1), (2), (3), (4) and (5) of the statutes, as affected by 2023 Wisconsin Act 12, are amended to read:

AB438,,40 77.71 Imposition of county, municipality, and special district sales and use taxes. (intro.) Whenever a sales and use tax ordinance is adopted under s. 77.70 or 77.701 or a special district resolution is adopted under s. 77.705 or 77.706, the following taxes are imposed:

AB438,,41 (1) For the privilege of selling, licensing, leasing, or renting tangible personal property and the items, property, and goods specified under s. 77.52 (1) (b), (c), and (d), and for the privilege of selling, licensing, performing, or furnishing services a sales tax is imposed upon retailers at the rates under s. 77.70 in the case of a county tax, at the rate under s. 77.701 in the case of a municipality tax, or at the rate under s. 77.705 or 77.706 in the case of a special district tax of the sales price from the sale, license, lease, or rental of tangible personal property and the items, property, and goods specified under s. 77.52 (1) (b), (c), and (d), except property taxed under sub. (4), sold, licensed, leased, or rented at retail in the county, municipality, or special district, or from selling, licensing, performing, or furnishing services described under s. 77.52 (2) in the county, municipality, or special district.

AB438,,42 (2) An excise tax is imposed at the rates under s. 77.70 in the case of a county tax, at the rate under s. 77.701 in the case of a municipality tax, or at the rate under s. 77.705 or 77.706 in the case of a special district tax of the purchase price upon every person storing, using, or otherwise consuming in the county, municipality, or special district tangible personal property, or items, property, or goods specified under s. 77.52 (1) (b), (c), or (d), or services if the tangible personal property, item, property, good, or service is subject to the state use tax under s. 77.53, except that a receipt indicating that the tax under sub. (1), (3), (4), or (5) has been paid relieves the buyer of liability for the tax under this subsection and except that if the buyer has paid a similar local tax in another state on a purchase of the same tangible personal property, item, property, good, or service that tax shall be credited against the tax under this subsection and except that for motor vehicles that are used for a purpose in addition to retention, demonstration, or display while held for sale in the regular course of business by a dealer the tax under this subsection is imposed not on the purchase price but on the amount under s. 77.53 (1m).

AB438,,43 (3) An excise tax is imposed upon a contractor engaged in construction activities within the county or special district at the rates under s. 77.70 in the case of a county tax, at the rate under s. 77.701 in the case of a municipality tax, or at the rate under s. 77.705 or 77.706 in the case of a special district tax of the purchase price of tangible personal property or items, property, or goods under s. 77.52 (1) (b), (c), or (d) that are used in constructing, altering, repairing, or improving real property and that became a component part of real property in that county, municipality, or special district, except that if the contractor has paid the sales tax of a county, municipality, or special district in this state on that tangible personal property, item, property, or good, or has paid a similar local sales tax in another state on a purchase of the same tangible personal property, item, property, or good, that tax shall be credited against the tax under this subsection.

AB438,,44 (4) An excise tax is imposed at the rates under s. 77.70 in the case of a county tax, at the rate under s. 77.701 in the case of a municipality tax, or at the rate under s. 77.705 or 77.706 in the case of a special district tax of the purchase price upon every person storing, using, or otherwise consuming a motor vehicle, boat, recreational vehicle, as defined in s. 340.01 (48r), or aircraft if that property must be registered or titled with this state and if that property is to be customarily kept in a county that has in effect an ordinance under s. 77.70, in a municipality that has in effect an ordinance under s. 77.701, or in a special district that has in effect a resolution under s. 77.705 or 77.706, except that if the buyer has paid a similar local sales tax in another state on a purchase of the same property, that tax shall be credited against the tax under this subsection. The lease or rental of a motor vehicle, boat, recreational vehicle, as defined in s. 340.01 (48r), or aircraft is not taxed under this subsection if the lease or rental does not require recurring periodic payments.

AB438,,45 (5) An excise tax is imposed on the purchase price for the lease or rental of a motor vehicle, boat, recreational vehicle, as defined in s. 340.01 (48r), or aircraft at the rates under s. 77.70 in the case of a county tax, at the rate under s. 77.701 in the case of a municipality tax, or at the rate under s. 77.705 or 77.706 in the case of a special district tax upon every person storing, using, or otherwise consuming in the county, municipality, or special district the motor vehicle, boat, recreational vehicle, as defined in s. 340.01 (48r), or aircraft if that property must be registered or titled with this state and if the lease or rental does not require recurring periodic payments, except that a receipt indicating that the tax under sub. (1) had been paid relieves the purchaser of liability for the tax under this subsection and except that if the purchaser has paid a similar local tax in another state on the same lease or rental of such motor vehicle, boat, recreational vehicle, as defined in s. 340.01 (48r), or aircraft, that tax shall be credited against the tax under this subsection.

AB438,11 Section 11. 77.76 (4) of the statutes, as affected by 2023 Wisconsin Act 12, is amended to read:

AB438,,47 77.76 (4) There shall be retained by the state 1.5 percent of the taxes collected for taxes imposed by special districts under ss. 77.705 and s. 77.706 and 1.75 percent of the taxes collected for taxes imposed by counties under s. 77.70 and for taxes imposed by municipalities under s. 77.701 to cover costs incurred by the state in administering, enforcing, and collecting the tax. All interest and penalties collected shall be deposited and retained by this state in the general fund.

AB438,12 Section 12. 77.76 (6) of the statutes is repealed.

AB438,13 Section 13. 79.037 (2) (intro.) of the statutes, as created by 2023 Wisconsin Act 12, is amended to read:

AB438,,50 79.037 (2) (intro.) In Subject to any reduction required under sub. (4), in 2024, the department of revenue shall determine the amount of the payments under this section as follows:

AB438,14 Section 14. 79.037 (3) of the statutes, as created by 2023 Wisconsin Act 12, is amended to read:

AB438,,52 79.037 (3) For Subject to any reduction required under sub. (4), for the distribution in 2025 and subsequent years, each county and municipality shall receive a payment under this section equal to the proportion of the total payments from the supplemental county and municipal aid account under s. 25.491 (9) that the county or municipality received in 2024, or if the total of payments received in 2024 by a county or municipality is reduced under sub. (4), the proportion of the total payments from the supplemental county and municipal aid account under s. 25.491 (9) that the county or municipality would have received in 2024 without that reduction, multiplied by the amount for the year in the supplemental county and municipal aid account under s. 25.491 (9).

AB438,15 Section 15. 79.037 (4) of the statutes is created to read:

AB438,,54 79.037 (4) (a) For the distribution in 2024 and subsequent years until 2050, if a county fails to make the full amount of a deposit required under s. 229.695 by July 1, the department of revenue shall reduce the county’s total of payments under this section for that year by the difference between the amount of the deposit required under s. 229.695 and the amount of any deposit made by July 1 of that year and direct the department of administration to pay to the baseball park facilities improvement segregated fund under s. 229.687 the amount of the reduction.

AB438,,55 (b) For the distribution in 2024 and subsequent years until 2050, if a 1st class city fails to make the full amount of a deposit required under s. 229.695 by July 1, the department of revenue shall reduce the 1st class city’s total of payments under this section for that year by the difference between the amount of the deposit required under s. 229.695 and the amount of any deposit made by July 1 of that year and direct the department of administration to pay to the baseball park facilities improvement segregated fund under s. 229.687 the amount of the reduction.

AB438,16 Section 16. 229.64 (1) of the statutes is renumbered 229.64 and amended to read:

AB438,,57 229.64 Legislative declaration. The legislature determines that the provision of assistance by state agencies to a district under this subchapter, and any appropriation or grant of funds to a district under this subchapter and the moral obligation pledge under s. 229.74 (7) serve a statewide public purpose by assisting the development, construction, improvement, repair, and maintenance of a professional baseball park facilities in the state for providing recreation, by encouraging economic development and tourism, by preserving business activities within the state, by generating additional tax revenues that would not exist without the baseball park facilities, by reducing unemployment, and by bringing needed capital into the state for the benefit and welfare of people throughout the state. The legislature determines that the taxes that may be imposed by a district under subch. V of ch. 77 are special taxes that are generated apart from any direct annual tax on taxable property.

AB438,17 Section 17. 229.64 (2) of the statutes is repealed.

AB438,18 Section 18. 229.65 (1) of the statutes is amended to read: