SRC-DBM, JXG S.B. 456 76(R)BILL ANALYSIS Senate Research CenterS.B. 456 By: Madla Economic Development 7/19/1999 Enrolled DIGEST Currently, the City of San Antonio is bidding to host the 2007 Pan American Games, while the cities of Dallas and Houston are bidding on the 2012 Olympics. The site selection committees that review these bids require the bidding cities to submit sufficient evidence with their bid that the state in which the bidder is located supports the bid and is willing to grant good faith assurances that the games will be produced in accordance with the bid should the games be awarded to that city. S.B. 456 will authorize the state to provide financial support to persons and municipalities as well as assurances that the Texas Department of Economic Development commitments will be fulfilled to the site selection organization sponsoring the games if a state location is the site for the 2007 Pan American Games or the XXX Olympiad in 2012. Financial support will be provided through a games support contract supported by a special fund in the treasury called the Olympics and Pan American Games Support Fund. The fund will be composed of incremental increases in state sales and use tax revenues that are directly related to the games activities in the geographical area where the games are to be presented. PURPOSE As enrolled, S.B. 456 facilitates and supports cooperative efforts of certain municipalities and counties to promote economic development by hosting the Pan American Games and the Olympic Games. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. DEFINITIONS. Defines "department," "endorsing municipality," "games," "games support contract," "joinder agreement," "joinder undertaking," "local organizing committee," and "site selection organization." SECTION 2. PURPOSE. Provides that the purpose of this Act is to provide assurances required by a site selection organization sponsoring the games. SECTION 3. LEGISLATIVE FINDINGS. Finds that the state's conduct of the 2007 Pan American Games or 2012 Olympic Games will provide invaluable public visibility throughout the world for this state and the communities where the games are held; encourage and provide major economic benefits to the state and site communities; and provide opportunities for the creation of jobs by local and Texas businesses that pay a living wage. SECTION 4. GUARANTEE OF STATE AND MUNICIPAL OBLIGATIONS; PAN AMERICAN GAMES TRUST FUND. (a) Defines "games," and "site selection organization." (b) Requires the comptroller to determine for each subsequent calendar quarter certain incremental increase in receipts, if a site selection organization selects a site for the games in this state pursuant to an application by a local organizing committee, after the first occurrence of a measurable economic impact in this state as a result of the preparation for the games, as determined by the comptroller, but in no event later than one year before the scheduled opening event of the game. (c) Requires the comptroller to designate as a market area for the games each area in which the comptroller determines there is a reasonable likelihood of measurable economic impact directly attributable to the preparation for and presentation of the games and related events, for the purposes of Subsection (b)(1) of this section. Requires the comptroller to determine the geographic boundaries of each market area. Requires the endorsing municipality that has been selected as the site for the games to be included in a market area for the games. (d) Requires the comptroller to retain the amount of municipal sales and use tax revenue determined under Subsection (b)(2) of this section from the amount otherwise required to be sent to the municipality under Section 321.502, Tax Code, beginning with the first distribution of that tax revenue that occurs after the date the comptroller makes the determination of the amount of municipal sales and use tax revenue under Subsection (b)(2), subject to SECTION 6 of this Act. Requires the comptroller to discontinue retaining municipal sales and use tax revenue under this subsection on the earlier of certain dates. (e) Authorizes an endorsing municipality to guarantee its obligations under a games support contract and this Act by pledging surcharges from user fees charged in connection with presentation of the games, in addition to municipal sales and use tax revenue retained under Subsection (d) of this section. (f) Requires the comptroller to deposit into a trust fund designated as the Pan American Games trust fund (PAGTF) the amount of municipal sales and use tax revenues retained under Subsection (d) of this section and, a portion of the tax revenue determined under Subsection (b)(1) of this section in an amount equal to 6.25 times the amount of that municipal sales and use tax revenue, subject to SECTION 6 of this Act and Subsection (m) of this section. Requires the endorsing municipality to deposit into PAGTF the amount of the endorsing municipality's hotel occupancy tax revenue determined under Subsection (b)(3) of this section, subject to SECTION 6 of this Act and Subsection (m) of this section. Requires the endorsing municipality to deposit that hotel occupancy tax revenue into PAGTF at least quarterly. Requires the comptroller to deposit at the same time a portion of the state tax revenue determined under Subsection (b)(1) of this section in an amount equal to 6.25 times the amount of that municipal hotel occupancy tax revenue, when the endorsing municipality makes a deposit of its hotel occupancy tax revenue. Provides that PAGTF is established outside the treasury but is held in trust by the comptroller for the administration of this Act. Authorizes money in PAGTF to be spent by the Texas Department of Economic Development (department) without appropriation only as provided by this Act. Requires the comptroller to discontinue depositing into PAGTF any state tax revenue determined under Subsection (b)(1) of this section on the earlier of a certain date. (g) Authorizes the department to use the funds in PAGTF only to fulfill joint obligations of the state and the endorsing municipality to a site selection organization under a games support contract or any other agreement providing assurances from the department or the endorsing municipality to a site selection organization. (h) Requires a local organizing committee to provide information required by the comptroller to enable the comptroller to fulfill the comptroller's duties under this Act. Requires a local organizing committee to provide an annual audited financial statement required by the comptroller no later than the end of the fourth month after the date the period covered by the financial statement ends. (i) Requires the comptroller to provide an estimate no later than September 1, 1999, of the total amount of state and municipal tax revenue that would be designated in PAGTF before January 1, 2008, if the games were to be held in this state at a site selected pursuant to an application by a local organizing committee. Requires the comptroller to provide the estimate on request to a local organizing committee. Authorizes a local organizing committee to submit the comptroller's estimate to a site selection organization. (j) Prohibits the department from making a disbursement from PAGTF unless the comptroller certifies that the disbursement is for a purpose for which the state and the endorsing municipality are jointly obligated under a games support contract or other agreement described by Subsection (g) of this section. (k) Requires the obligation to be satisfied first out of municipal revenue deposited in the trust fund and any interest earned on that municipal revenue, if the comptroller certifies under Subsection (j) of this section that a disbursement may be made from PAGTF. Requires state revenue deposited into the trust fund and any interest earned on that state revenue to be used to satisfy the portion of the deficit not covered by the municipal revenue, if the municipal revenue is not sufficient to satisfy the entire deficit. (l) Requires the comptroller to transfer to the general revenue fund any money remaining in PAGTF, not to exceed the amount of state revenue remaining in the trust fund, plus any interest earned on that state revenue, on January 1, 2009. Requires the comptroller to remit to the endorsing municipality any money remaining in the trust fund after the required amount is transferred to the general revenue fund. (m) Sets forth provisions regarding state and municipal tax revenue. SECTION 5. GUARANTEE OF STATE AND MUNICIPAL OBLIGATIONS; OLYMPIC GAMES TRUST FUND. (a) Defines "games" and "site selection organization." (b) Requires the comptroller to determine certain incremental increases in the receipts for each subsequent calendar year, if a site selection organization selects a site for the games in this state pursuant to an application by a local organizing committee, after the first occurrence of a measurable economic impact in this state as a result of the preparation for the games, as determined by the comptroller, but in no event later than one year before the scheduled opening event of the games. (c) Requires the comptroller to designate as a market area for the games each area in which the comptroller determines there is a reasonable likelihood of measurable economic impact directly attributable to the preparation for and presentation of the games and related events, for the purposes of Subsection (b)(1). Requires the comptroller to determine the geographic boundaries of each market area. Requires the endorsing municipality that has been selected as the site for the games to be included in a market area for the games. (d) Requires the comptroller to retain, for the purpose of guaranteeing the joint obligations of the state and the endorsing municipality under a games support contract and this Act, the amount of municipal sales and use tax revenue determined under Subsection (b)(2) of this section from the amounts otherwise required to be sent to the municipality under Section 321.502, Tax Code, beginning with the first distribution of that tax revenue that occurs after the date the comptroller makes the determination of the amount of municipal sales and use tax revenue under Subsection (b)(2), subject to SECTION 6 of this Act. Requires the comptroller to discontinue retaining municipal sales and use tax revenue under this subsection on the earlier of a certain date. (e) Authorizes an endorsing municipality to guarantee its obligations under a games support contract and this Act by pledging surcharges from user fees, in addition to municipal sales and use tax revenue retained under Subsection (d) of this section. (f) Requires the comptroller to deposit into a trust fund designated as the Olympic Games trust fund (OGTF) the amount of municipal sales and use tax revenue retained under Subsection (d) of this section, and a portion of the state tax revenue determined under Subsection (b)(1) of this section in an amount equal to 6.25 times the amount of that municipal sales and use tax revenue, subject to SECTION 6 of this Act and Subsection (m) of this section. Provides that OGTF is establish outside the treasury but is held in trust by the comptroller for the administration of this Act. Authorizes money in the trust fund to be spent by the department without appropriation only as provided by this Act. Requires the comptroller to discontinue deposit of the amount of state tax revenue determined under Subsection (b)(1) of this section on the earlier of a certain date. (g) Authorizes the department to use the funds in OGTF only to fulfill joint obligations of the state and the endorsing municipality to a site-selection organization under a games support contract or any other agreement providing assurances from the department or the endorsing municipality to a site selection organization. (h) Requires a local organizing committee to provide information required by the comptroller to enable the comptroller to fulfill the comptroller's duties under this Act. Requires a local organizing committee to provide an annual audited financial statement required by the comptroller no later than the end of the fourth month after the date the period covered by the financial statement ends. (i) Requires the comptroller to provide an estimate before August 31, 2000, or as soon as practical after that date, of the total amount of state and municipal tax revenue that would be deposited in OGTF if the games were to be held in this state at a site selected pursuant to an application by a local organizing committee. Authorizes a local organizing committee to submit the comptroller's estimate to a site selection organization. (j) Prohibits the department from making a disbursement from OGTF unless the comptroller certifies that the disbursement is for a purpose for which the state and the endorsing municipality are jointly obligated under a games support contract or other agreement described by Subsection (g) of this section. Prohibits a disbursement from being made from the trust fund that the department determines would be used for the purpose of soliciting the relocation of a professional sports located in this state. (k) Requires the obligation to be satisfied proportionately from the state and municipal revenue in the trust fund, if the comptroller certifies under Subsection (j) of this section that a disbursement may be made from OGTF. (l) Requires the comptroller to transfer to the general revenue fund any money remaining in OGTF, not to exceed the amount of state revenue remaining in the trust fund, plus any interest earned on that state revenue, two years after the closing event of the games. Requires the comptroller to remit to the endorsing municipality any money remaining in the trust fund after the required amount is transferred to the general revenue fund. (m) Sets forth prohibitions for OGTF and the joint liability of the state and endorsing municipality. SECTION 6. MUNICIPAL ELECTION. (a) Requires an endorsing municipality to hold an election in the municipality to determine whether the municipality may contribute a portion of its sales and use taxes and hotel occupancy taxes to PAGTF under SECTION 4 of this Act or a portion of its sales and use taxes to OGTF under SECTION 5 of this Act, as applicable to the games for which the municipality has authorized a bid on its behalf. Requires the election to be held on a uniform election date that occurs after the effective date of this Act and before the date a site selection organization requires the endorsing municipality and the state to enter into a joinder undertaking relating to the applicable games. (b) Provides that an endorsing municipality authorizing a bid on its behalf for the 2007 Pan American Games is not required to hold an election under this section if there is not a sufficient number of days between the effective date of this Act and a uniform election date that occurs before the date a site selection organization requires that the endorsing municipality and the state enter into a joinder undertaking to allow the municipality to submit the proposed election to the United States attorney general for preclearance under SECTION 5 of the Voting Rights Act of 1965, as amended (42 U.S.C. Section 1973c), at least 120 days before the election. (c) Sets forth provisions regarding the election and contribution of a portion of the municipality's taxes to PAGTF and OGTF. SECTION 7. ASSISTANCE OF DEPARTMENT AND OTHER STATE AGENCIES. Requires the department to review requests from a local organizing committee that the department, on behalf of the state, enter into a games support contract that is required by a site selection organization in connection with the committee's bid to host any of the games. Sets forth the information required to be included in a request. Requires the department to approve or deny a request made under Subsection (a) of this section no later than the 30th day after the request is submitted. Authorizes the department to agree in a joinder undertaking entered into with a site selection organization that the department will meet certain conditions. Authorizes the department to agree in a joinder agreement that the state will meet certain conditions. Authorizes the department to agree to execute a joinder undertaking, joinder agreement, or other games support contract only if certain conditions exist. Sets forth acceptable conditions for the department's approval of a games support contract. Authorizes a games support contract to contain any additional provisions the department requires in order to carry out the purposes of this Act. Authorizes the department to require a local organizing committee to list the state as an additional insured on any policy of insurance purchased by the local organizing committee and required by a site selection organization to be in effect in connection with the games. Sets forth authorized provisions regarding the Texas Department of Transportation, the Department of Public Safety of the State of Texas, and the Texas Department of Housing and Community Affairs. Prohibits the department, notwithstanding any other provision of this Act, from obligating the state to pay or otherwise provide funds to cover the costs of the construction or purchase of a building or other facility by a municipality. SECTION 8. APPLICATION OF OPEN MEETINGS AND OPEN RECORDS LAWS. Provides that a local organizing committee and its governing body are subject to Chapters 551 and 552, Government Code. Provides that the governing body of a local organizing committee is considered a governmental body as defined by those chapters, for purposes of those chapters. Provides that the records and information of a local organizing committee are considered public records and public information, for purposes of Chapter 552, Government Code. Provides that a final bid that is submitted by a local organizing committee to a site selection organization, or a draft of that bid, is excepted from required public disclosure under Chapter 552, Government Code, until the applicable site selection organization selects the site for the applicable games. Provides that Chapter 551, Government Code, does not apply to a meeting of a subcommittee of the governing body of a local organizing committee if certain conditions exist. Provides that a tape recording made under Subsection (c) of this section is subject to required public disclosure in the manner prescribed by Chapter 552, Government Code, for a public record. SECTION 9. TAX EXEMPTIONS FOR LOCAL ORGANIZING COMMITTEE. Sets forth provisions which exempt a local organizing committee from paying a federal income tax. Provides that the exemptions provided by Subsections (a)(1), (2), and (3) of this section take effect on the first day of the first month after the effective date of this Act. Makes application of Subsection (a)(4) prospective. SECTION 10. ETHICS. Sets forth requirements for a local organizing committee that submits a request. Sets forth requirements for a report made under Subsection (a)(2)(B) of this section. Requires the endorsing municipality for which a local organizing committee submits a request under Section 7(a) of this Act to have certain requirements. SECTION 6. BRIBERY. Provides that a person commits an offense if certain conditions exist. Provides that it is a defense to prosecution under Subsection (a) of this section that the benefit conferred is a meal or entertainment reported under Section 10(a)(2)(B) of this Act. Provides that it is not a defense to prosecution under Subsection (a) of this section that a person whom the actor sought to influence was not qualified to act as the actor intended the person to act. Provides that it is not a defense to prosecution under Subsection (a) of this section that the benefit is not offered or conferred or that the benefit is not solicited or accepted until after certain conditions. Defines "benefit." Provides that an offense under this section is a felony of the second degree. SECTION 12.Emergency clause. Effective date: 90 days after adjournment.