BILL ANALYSIS Ó
SB 1465
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SENATE THIRD READING
SB
1465 (De León)
As Amended August 15, 2016
Majority vote
SENATE VOTE: 35-1
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Arts |7-0 |Chu, Obernolte, | |
| | |Hadley, Levine, Low, | |
| | |Medina, Nazarian | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |19-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Holden, Jones, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Wagner, | |
| | |Weber, Wood, McCarty | |
| | | | |
SB 1465
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| | | | |
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SUMMARY: Enacts the 2024 Olympic Games and Paralympic Games Act
for the purpose of establishing a structure to provide state
financial guarantees, as required by the International Olympic
Committee (IOC), to demonstrate that California and the City of
Los Angeles (LA) are prepared to host the summer games.
Specifically, this bill:
1)Authorizes the Governor to enter into agreements for the state
to be jointly liable (up to $250 million), as specified, with
the Organizing Committee for the Olympic Games (OCOG), a
nonprofit corporation, for obligations of the OCOG and for any
financial deficit relating to the games.
2)Establishes the Olympic Games Trust Fund within the State
Treasury and provides that 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. If the City of Los Angeles is not selected as the
host city, this fund is immediately terminated and any moneys
therein immediately revert to the General Fund.
3)Stipulates that all moneys deposited, transferred, or
otherwise contained in the trust fund must, upon appropriation
by the Legislature, be used for the sole purpose of obtaining
adequate security to demonstrate the state's ability to
fulfill its obligations to indemnify and insure up to $250
million of any net financial deficit and general liability
resulting from the conduct of the games.
4)Specifies that the security provided by the state pursuant to
this Act may not be accessed to cover a deficit from the games
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until all the following occur:
a) Security provided by the OCOG is fully exhausted.
b) The City of Los Angeles has exhausted at least $250
million of its security deposit.
c) Security provided by any other person or entity is
exhausted.
d) Limits of applicable insurance policies are fully
exhausted.
e) The OCOG has exhausted all efforts to seek payment from
all third parties owning moneys or otherwise liable to the
OCOG.
FISCAL: According to the Assembly Appropriations Committee,
potential future one-time state costs of up to $250 million, if
Los Angeles is selected for the 2024 Olympics, the games incur
large financial deficits, and all other securities provided by
non-state entities are first exhausted. The $250 million dollar
liability may be secured by a General Fund appropriation or by
insurance coverage, letters of credit, or other acceptable
secured instruments purchased or secured by the General Funds,
or by any combination thereof.
COMMENTS: According to the author's office, this bill would
establish a structure to provide state financial guarantees to
demonstrate that California is serious and prepared to host the
2024 Olympic Games and Paralympic Games. This guarantee is
required by the United States Olympic Committee (USOC) and the
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International Olympic Committee and International Paralympic
Committee (IOC) as a prerequisite before any city can be
considered for hosting an Olympic Games. In support, the LA
Area Chamber of Commerce notes that the only two times the Games
made money were when Los Angeles served as host (1932 and 1984).
This fact, they claim, will make passage of this measure very
low risk to the state. They state, "hosting the Olympics will
be good for tourism, good for tax revenues and business, and
good for state pride and spirit." The State Building and
Construction Trades Council also notes that proceeds from the
1984 games continue to support youth athletic programs all over
southern California.
Recent amendments narrow the contracts the Governor may enter
under the bill to "games support contracts" as defined, and
remove the restriction which limited execution of contracts to
agreements between the Governor and only the IOC. In addition,
they make express that the funding security provided by the
state shall be accomplished solely by means of funding
mechanisms identified by the bill, only after specified
conditions are met and are to be paid into and from the special
Olympic Games Trust Fund (OGTF) the bill would establish. They
further clarify that the Controller may use cash flow loans made
from the OGTF to the General Fund to fulfill the state
obligations, as authorized under the Government Code.
Additional amendments are technical and conforming.
Please see Assembly Arts, Entertainment, Sports, Tourism, and
Internet Media analysis for a full discussion of the measure.
Analysis Prepared by:
Dana Mitchell / A.,E.,S.,T., & I.M. / (916)
319-3450
FN: 0004039
SB 1465
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