Senate Bill No. 41

Introduced by Senators De León and Leno

(Coauthors: Senators Allen, Hernandez, Hill, Huff, Lara, Liu, Mitchell, Pavley, and Roth)

(Coauthors: Assembly Members Atkins, Bloom, Burke, Chau, Chiu, Chu, Dababneh, Gatto, Gipson, Gomez, Gordon, Holden, Jones-Sawyer, Levine, Mullin, Nazarian, O'Donnell, Olsen, Rendon, Ridley-Thomas, Santiago, Mark Stone, Ting, and Wilk)

December 1, 2014

An act relating to public contracts, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 41, as introduced, De León. Public contracts: 2024 Olympic Games and Paralympic Games.

Existing law provides specified requirements in awarding certain public contracts.

This bill would authorize the Governor to sign agreements required by the United States Olympic Committee as part of the bid process for the City of Los Angeles or the City and County of San Francisco to become the United States applicant city and candidate city for the 2024 Olympic Games and Paralympic Games.

This bill would make legislative findings and declarations that, among other things, the endorsing municipality, as defined, has developed a self-sufficient bid for financing the games. This bill would authorize the Governor to enter into an agreement for the state to be jointly liable, not to exceed a specified amount, with the Organizing Committee for the Olympic Games (OCOG), as specified, for obligations of the OCOG, and for any financial deficit relating to the games, as provided.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

This act is known, and may be cited as, The 2024
Olympic Games and Paralympic Games Act.

SEC. 2.  

For purposes of this act:

(a) “Applicant committee agreement” means agreements to be
entered into between the Organizing Committee for the Olympic
Games (OCOG) and the United States Olympic Committee
(USOC) if, and upon, the USOC’s selection of the City of Los
Angeles or the City and County of San Francisco as the official
United States candidate city.

(b) “Bid committee agreement” means agreements entered into
between the OCOG and the USOC governing the OCOG and the
bid process.

(c) “Endorsing municipality” means the City of Los Angeles
or the City and County of San Francisco which has authorized a
bid by a OCOG for selection of the municipality as the site of the
Olympic Games and Paralympic Games.

(d) “Games” means the 2024 Olympic Games.

(e) “Games support contract” means a joinder undertaking, a
joinder agreement, or a similar contract executed by the Governor
and containing terms permitted or required by this act.

(f) “Joinder agreement” means an agreement entered into by:

(1) The Governor, on behalf of this state, and a site selection
organization setting out representations and assurances by the state
in connection with the selection of a site in this state for the
location of the games.

(2) The endorsing municipality and a site selection organization
setting out representations and assurances by the endorsing
municipality in connection with the selection of a site in this state
for the location of the games.

(g) “Joinder undertaking” means an agreement entered into by:

(1) The Governor, on behalf of this state, and a site selection
organization that the state will execute a joinder agreement in the
event that the site selection organization selects a site in this state
for the games.

(2) The endorsing municipality and a site selection organization
that the endorsing municipality will execute a joinder agreement
in the event that the site selection organization selects a site in this
state for the games.

(h) “OCOG” means a nonprofit corporation, or its successor in
interest, that:

(1) Has been authorized by the endorsing municipality to pursue
an application and bid on the applicant’s behalf to a site selection
organization for selection as the site for the games.

(2) With the authorization of the endorsing municipality, has
executed the bid committee agreement with a site selection
organization regarding a bid to host the games.

(i) “Site selection organization” means the United States
Olympic Committee, the International Olympic Committee, the
International Paralympic Committee, all three or some
combination, as applicable.

SEC. 3.  

The Legislature finds and declares all of the following:

(a) The purpose of this act is to provide assurances required by
a site selection organization sponsoring the games.

(b) Hosting the games in California is expected to generate
billions of dollars for the state’s economy. The endorsing
municipality has developed a self-sufficient bid for financing games
that is based on realistic and conservative revenue scenarios and
has budgeted sufficient funds to reimburse security and other
service costs provided by local regional governments during the
games.

(c) The endorsing municipality plans to host an environmentally
responsible games; has committed to sports and recreational
opportunities for young people throughout each area by planning
to generate a legacy for youth programs and other sports purposes
in California with excess revenues from the games; and plans to
develop and implement a unique and broad-based, statewide
cultural program.

(d) The endorsing municipality has involved athletes, sports
professionals, environmentalists, business and financial experts,
nonprofit organizations, youth service leaders, and individuals
who represent the entire diversity of area in its bid and board of
directors.

(e) The USOC requires that all bid states, bid cities, and bid
committees execute certain agreements including the joinder
undertaking, which joinder undertaking must be executed on or
before ____.

(f) The endorsing municipality expects that if it is chosen as the
host city, and once the games have concluded, there will be net
revenue exceeding expenses that can be devoted to legacy programs
for youth and citizens of California.

SEC. 4.  

(a) The Governor may agree, in accordance with law
and subject to Sections 5 and 6 of this act, in a joinder undertaking
entered into with a site selection organization that:

(1) The Governor shall execute a joinder agreement if the site
selection organization selects a site in this state for the games.

(2) The state shall refrain, during the period, or any portion
thereof, between the execution of the joinder undertaking and
award by the International Olympic Committee (IOC) of the games
to a host city, from becoming a party to or approving or consenting
to any act, contract, commitment, or other action contrary to, or
which might affect, any of the obligations stipulated in the joinder
agreement.

(3) The Governor may agree that any dispute in connection with
the joinder undertaking arising during the period between the
execution of the joinder undertaking and the IOC’s award of the
games to a host city shall be definitively settled as provided in the
bid committee agreement.

(b) The Governor may agree in a joinder agreement that the
state shall, in accordance with law and subject to Sections 5 and
6 of this act, do the following:

(1) Provide or cause to be provided any or all of the state
government funding, facilities, and other resources specified in
the OCOG’s bid to host the games.

(2) The state will be liable, solely by means of the funding
mechanism established by Sections 5 and 6 of this act, for:

(A) Obligations of the OCOG to a site selection organization,
including obligations indemnifying the site selection organization
against claims of and liabilities to third parties arising out of or
relating to the games.

(B) Any financial deficit relating to the OCOG or the games.

(3) The state’s liability shall not exceed the amount of funds
appropriated to the Olympic Games Trust Fund established in
Section 5 of this act. Any liability above this amount shall be the
responsibility of the OCOG.

(4) Acknowledge that the OCOG will be bound by a series of
agreements with the site selection organization as set forth in the
joinder agreement.

(C) The Governor shall execute a joinder undertaking and a
joinder agreement, provided the parties conform with this act.

(D) A games support contract may contain any additional
provisions the Governor requires in order to carry out the purposes
of this act.

SEC. 5.  

(a) There is hereby established in the State Treasury
a special fund to be known as the “Olympic Games Trust Fund.”

(b) The state may choose to fund the Olympic Games Trust
Fund in any manner it considers appropriate, and at the time or
times the state determines necessary. It is the intent of the
Legislature that the funding mechanism for the fund shall be
determined on or about the time of the selection of the endorsing
municipality as the host city by the International Olympic and
Paralympic Committees.

(c) The funds in the trust fund may be used only for the sole
purpose of fulfilling the obligations of the state under a games
support contract to provide adequate security as described in
Section 6.

(d) No additional state funds shall be deposited into the Olympic
Games Trust Fund once the Director of Finance determines that
the account has achieved, or is reasonably expected to otherwise
accrue, a sufficient balance to provide adequate security, acceptable
to the site selection organization, to demonstrate the state’s ability
to fulfill its obligations under a games support contract, or any
other agreement, to indemnify and insure up to two hundred fifty
million dollars ($250,000,000) of any net financial deficit and
general liability resulting from the conduct of the games.

(e) If the endorsing municipality is selected by the site selection
organization as the host city for the games, the Olympic Games
Trust Fund shall be maintained until a determination by the
Department of Finance is made that the state’s obligations under
a games support contract, or any other agreement, to indemnify
and insure against any net financial deficit and general liability
resulting from the conduct of the games are satisfied and
concluded, at which time the trust fund shall be terminated. If the
endorsing municipality in the State of California is not selected
by the United States Olympic Committee as the United States
candidate city to host the games, or if the endorsing municipality
is not selected by the IOC as the host city for the games, the
Olympic Games Trust Fund shall be immediately terminated.

(f) Upon the termination of the Olympic Games Trust Fund, all
sums earmarked, transferred, or contained in the fund, along with
any investment earnings retained in the fund, shall immediately
revert to the General Fund.

SEC. 6.  

(a) Any moneys deposited, transferred, or otherwise
contained in the Olympic Games Trust Fund established in Section
5 shall be, upon appropriation by the Legislature, used for the sole
purpose of obtaining adequate security, acceptable to the United
States Olympic Committee and the International Olympic and
Paralympic Committees, to demonstrate the state’s ability to fulfill
its obligations under a games support contract to indemnify and
insure up to two hundred fifty million dollars ($250,000,000) of
any general liability and net financial deficit resulting from the
conduct of the games. The security may be provided by moneys
contained in the trust fund as provided in Section 5 of this act, or
by insurance coverage, letters of credit, or other acceptable secured
instruments purchased or secured by the moneys, or by any
combination thereof. In no event may the liability of the state under
all games support contracts, any other agreements related to the
conduct of the games, and all financial obligations of the state
otherwise arising under this act, exceed two hundred fifty million
dollars ($250,000,000) in the aggregate.

(b) Obligations authorized by this act shall be payable solely
from the Olympic Games Trust Fund. Neither the full faith and
credit nor the taxing power of the state are or may be pledged for
any payment under any obligation authorized by this act.

SEC. 7.  

The state shall be the payer of last resort with regard
to any net financial deficit as defined in this act. The security
provided pursuant to this act may not be accessed to cover any
general liability and net financial deficit indemnified by the state
under the games support contract until:

(a) The security provided by the OCOG is fully expended and
exhausted.

(b) Any security provided by any other person or entity is fully
expended and exhausted.

(c) The limits of available insurance policies covering any
general liability obligation and the net financial deficit, or any
expense or liability used in determining the net financial deficit,
have been fully expended and exhausted.

(d) Payment has been sought by the OCOG from all third parties
owing moneys or otherwise liable to the OCOG.

SEC. 8.  

The OCOG shall list the state as an additional insured
on any policy of insurance purchased by the OCOG to be in effect
in connection with the preparation for and conduct of the games.

SEC. 9.  

The OCOG may not engage in any conduct that reflects
unfavorably upon this state, the endorsing municipality, or the
games, or that is contrary to law or to the rules and regulations of
the United States Olympic Committee and the International
Olympic and Paralympic Committees.

SEC. 10.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to meet deadlines for the bid process for the 2024
Olympic Games, it is necessary that this act go into immediate
effect.