Senate Bill No. 1465

Introduced by Senator De León

(Coauthor: Assembly Member Rendon)

February 19, 2016

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

LEGISLATIVE COUNSEL’S DIGEST

SB 1465, 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 with the International Olympic and Paralympic Committee, as part of the site selection process for the City of Los Angeles to become the host 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) “Endorsing municipality” means the City of Los Angeles,
which has authorized a bid by an OCOG for selection of the
municipality as the site of the games.

(b) “Games” means the 2024 Olympic and Paralympic Games.

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

(d) “Joinder agreement” means an agreement entered into by
the Governor, on behalf of the state, and the International Olympic
Committee and the International Paralympic Committee 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.

(e) “Organizing Committee for the Olympic Games” or “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 endorsing municipality’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 a bid committee agreement with the United States
Olympic Committee regarding a bid and the bid process to host
the games.

(f) “Site selection organization” means the International Olympic
Committee, the International Paralympic Committee, or both, 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 which will select a city to host the
games.

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

(c) The endorsing municipality plans to host a sustainable and
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,
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 the endorsing municipality’s
area in its bid.

(e) 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.  

The Governor may agree in a joinder agreement that
the state shall, in accordance with law and subject to Sections 5,
6, and 7 of this act, do the following:

(a) 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.

(b) Accept liability, solely by means of the funding mechanism
established by Sections 5, 6, and 7 of this act, for both of the
following:

(1) 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.

(2) Any financial deficit relating to the OCOG or the games, to
not exceed the amount appropriated to the Olympic Games Trust
Fund established in Section 5 of this act. Any liability for an
amount in excess of that amount shall be the responsibility of the
OCOG.

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

(d) The Governor shall execute a joinder agreement, provided
that the parties conform to this act.

(e) A games support contract may contain 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 site selection organizations.

(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 site selection organization 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 site
selection organization, 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, along with the endorsing municipality
and subject to the limitations set forth in Sections 5 and 6 of this
act, be the payer of last resort with regard to any net financial
deficit. 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
after all of the following occur:

(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.

(e) The endorsing municipality has expended and exhausted
____ dollars ($____) of the endorsing municipality’s security
deposit.

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.