Amended in Assembly August 15, 2016

Amended in Assembly June 16, 2016

Amended in Senate May 31, 2016

Amended in Senate March 29, 2016

Senate Bill No. 1465

Introduced by Senator De León

(Principal coauthor: Assembly Member Rendon)

(Coauthors: Senators Allen, Block, Gaines, Hall, Pan, and Pavley)

(Coauthors: Assembly Members Bonta, Chau, Chu, Dababneh, Gatto, Gipson, Gomez, Jones-Sawyer, Lopez, Low, Ridley-Thomas, and Santiago)

February 19, 2016

An act relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 1465, as amended, 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 begin delete sign agreements with the International Olympic and Paralympic Committees, as part of end delete begin insert execute games support contracts, not to exceed a specified amount, in connection with end insert the site selection process for the City of Los Angeles to become the host for the 2024 Olympic Games and Paralympic begin delete Games. end delete begin insert Games, that accept financial liability to provide the state security for amounts owed by the Organizing Committee for the Olympic Games (OCOG), as specified, and for any financial deficit accruing to the OCOG as a result of the hosting of the games by the endorsing municipality, as defined. end insert

This bill would make legislative findings and declarations that, among other things, the endorsing begin delete municipality, as defined, end delete begin insert municipality end insert has developed a self-sufficient bid for financing the games. begin delete 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. end delete

Vote: majority. 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 the Organizing Committee for the
Olympic Games (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 begin delete 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 end delete in connection with
the selection of a site in this state for the location of the games.

(e) “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.

begin insert

(g) “State security” means the financial obligation, not to exceed
two hundred fifty million dollars ($250,000,000), undertaken by
the state pursuant to a games support contract executed by the
Governor in accordance with this act.

end insert

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 that 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 this state with excess revenues from the games,
and plans to develop and implement a unique and broad-based,
cultural program.

(d) The endorsing municipality will involve 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
state 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.  

begin insert (a) end insert begin insert   end insert The Governor may begin delete agree in a joinder agreement
that the state shall, end delete begin insert execute games support contracts on behalf of
the state that, end insert in accordance with law and subject to begin insert the
requirements and limitations set forth in end insert Sections 5, 6, and 7 of
this act, begin delete do the following: end delete begin insert accept financial liability, funded solely
by means of the funding mechanism established by Sections 5, 6,
and 7 of this act, and in an aggregate amount that under no
circumstance shall exceed two hundred fifty million dollars
($250,000,000), to provide the state security for the following: end insert

begin delete

(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.

end delete begin delete

(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:

end delete

(1)  begin delete Obligations of end delete begin insert Amounts owed by end insert the OCOG to a site
selection begin delete organization, including obligations indemnifying the site
selection organization against end delete begin insert organization for end insert claims begin delete of and
liabilities to end delete begin insert by end insert third parties arising out of or relating to the games.

(2) Any financial deficit begin delete relating end delete begin insert accruing end insert to the OCOG begin delete or the
games, not to exceed the amount appropriated to the Olympic
Games Trust Fund established in Section 5 of this act. end delete begin insert as a result
of the hosting of the games by the endorsing municipality. end insert Any
liability for an amount in excess of begin delete that amount end delete begin insert the state security
of two hundred fifty million dollars ($250,000,000) end insert shall be the
responsibility of begin delete the OCOG. end delete begin insert parties other than the state. end insert

begin delete

(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.

end delete begin delete

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

end delete begin delete

(e) A

end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert games support begin delete contract end delete begin insert contracts end insert may contain additional
provisions begin insert that end insert 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 begin delete adequate security as described in
Section 6. end delete begin insert the state security. Notwithstanding any other law, the
Controller may use the funds in the trust fund for cashflow loans
to the General Fund as provided in Sections 16310 and 16381 of
the Government Code. end insert

(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, begin delete 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. end delete begin insert the
balance necessary to provide the state security pursuant to a games
support contract. end insert

(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 begin delete a determination by the
Department of end delete begin insert the Director of end insert Finance begin delete is made end delete begin insert makes a
determination end insert that the state’s begin delete obligations end delete begin insert obligation to provide the
state security end insert under a games support begin delete 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 end delete
begin insert contract has been end insert satisfied and concluded, at which time the trust
fund shall be terminated. begin delete If end delete

begin insert (f) end insert begin insert   end insert begin insert If end insert 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.

begin delete

(f)

end delete

begin insert (g) end insert  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 begin delete 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. end delete begin insert providing the state security under a games
support contract. end insert The begin insert state end insert security may be provided by moneys
contained in the trust fund begin delete as provided end delete begin insert established end insert in Section 5 of
this act, or by insurance coverage, letters of credit, or other
begin delete acceptable end delete secured instruments purchased or secured by the
moneys, or by any combination begin delete thereof. end delete begin insert thereof as specified in a
games support contract. end insert 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 shall be pledged for
any payment under any obligation authorized by this act.

SEC. 7.  

The state shall, begin delete along with the endorsing municipality
and end delete subject to the limitations set forth in Sections 5 and 6 of this
begin delete act, end delete begin insert act and the games support contract, end insert be the payer of last resort
with regard to begin delete any net financial deficit. end delete begin insert the use of the state security. end insert
The begin insert state end insert security begin delete provided pursuant to this act end delete may not be accessed
to cover any begin delete general liability and net financial deficit indemnified
by the state under the end delete begin insert obligation of the state under a end insert games support
contract until after all of the following occur:

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

begin insert

(b) The endorsing municipality has expended and exhausted at
least two hundred fifty million dollars ($250,000,000) of the
endorsing municipality’s security.

end insert begin delete

(b)

end delete

begin insert (c) end insert  Any security provided by any other person or entity is fully
expended and exhausted.

begin delete

(c)

end delete

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

begin delete

(d) Payment has been sought by the OCOG

end delete

begin insert end insert
begin insert (e) end insert begin insert   end insert begin insert The OCOG has exhausted all efforts to seek payment end insert from
all third parties owing moneys or otherwise liable to the OCOG.

begin delete

(e) The endorsing municipality has expended and exhausted
two hundred fifty million dollars ($250,000,000) of the endorsing
municipality’s security deposit.

end delete

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 shall 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.