AN ACT 1-1 relating to facilitating and supporting efforts of certain 1-2 municipalities to promote economic development by hosting the Pan 1-3 American Games and the Olympic Games; providing a penalty. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. DEFINITIONS. In this Act: 1-6 (1) "Department" means the Texas Department of 1-7 Economic Development. 1-8 (2) "Endorsing municipality" means a municipality that 1-9 has a population of 850,000 or more according to the most recent 1-10 federal decennial census and that authorizes a bid by a local 1-11 organizing committee for selection of the municipality as the site 1-12 of the 2007 Pan American Games or the 2012 Olympic Games. 1-13 (3) "Games" means the 2007 Pan American Games or the 1-14 2012 Olympic Games. 1-15 (4) "Games support contract" means a joinder 1-16 undertaking, a joinder agreement, or a similar contract executed by 1-17 the department and containing terms permitted or required by this 1-18 Act. 1-19 (5) "Joinder agreement" means an agreement entered 1-20 into by: 1-21 (A) the department on behalf of this state and a 1-22 site selection organization setting out representations and 1-23 assurances by the state in connection with the selection of a site 1-24 in this state for the location of any of the games; or 2-1 (B) an endorsing municipality and a site 2-2 selection organization setting out representations and assurances 2-3 by the endorsing municipality in connection with the selection of a 2-4 site in this state for the location of any of the games. 2-5 (6) "Joinder undertaking" means an agreement entered 2-6 into by: 2-7 (A) the department on behalf of this state and a 2-8 site selection organization that the state will execute a joinder 2-9 agreement in the event that the site selection organization selects 2-10 a site in this state for any of the games; or 2-11 (B) an endorsing municipality and a site 2-12 selection organization that the municipality will execute a joinder 2-13 agreement in the event that the site selection organization selects 2-14 a site in this state for any of the games. 2-15 (7) "Local organizing committee" means a nonprofit 2-16 corporation or its successor in interest that: 2-17 (A) has been authorized by an endorsing 2-18 municipality to pursue an application and bid on the applicant's 2-19 behalf to a site selection organization for selection as the site 2-20 of one of the games; or 2-21 (B) with the authorization of an endorsing 2-22 municipality, has executed an agreement with a site selection 2-23 organization regarding a bid to host one of the games. 2-24 (8) "Site selection organization" means the United 2-25 States Olympic Committee, the International Olympic Committee, or 2-26 the Pan American Sports Organization. 3-1 SECTION 2. PURPOSE. The purpose of this Act is to provide 3-2 assurances required by a site selection organization sponsoring the 3-3 games. 3-4 SECTION 3. LEGISLATIVE FINDINGS. The conduct in this state 3-5 of the 2007 Pan American Games or the 2012 Olympic Games will: 3-6 (1) provide invaluable public visibility throughout 3-7 the world for this state and the communities where the games are 3-8 held; 3-9 (2) encourage and provide major economic benefits to 3-10 the communities where the games are held and to the entire state; 3-11 and 3-12 (3) provide opportunities for the creation of jobs by 3-13 local and Texas businesses that pay a living wage. 3-14 SECTION 4. GUARANTEE OF STATE AND MUNICIPAL OBLIGATIONS; PAN 3-15 AMERICAN GAMES TRUST FUND. (a) In this section: 3-16 (1) "Games" means the 2007 Pan American Games. 3-17 (2) "Site selection organization" means the United 3-18 States Olympic Committee or the Pan American Sports Organization. 3-19 (b) If a site selection organization selects a site for the 3-20 games in this state pursuant to an application by a local 3-21 organizing committee, after the first occurrence of a measurable 3-22 economic impact in this state as a result of the preparation for 3-23 the games, as determined by the comptroller, but in no event later 3-24 than one year before the scheduled opening event of the games, the 3-25 comptroller shall determine for each subsequent calendar quarter, 3-26 in accordance with procedures developed by the comptroller: 4-1 (1) the incremental increase in the receipts to the 4-2 state from the taxes imposed under Chapters 151, 152, 156, and 183, 4-3 Tax Code, and under Title 5, Alcoholic Beverage Code, within the 4-4 market areas designated under Subsection (c) of this section, that 4-5 is directly attributable, as determined by the comptroller, to the 4-6 preparation for and presentation of the games and related events; 4-7 (2) the incremental increase in the receipts collected 4-8 by the state on behalf of the endorsing municipality from the sales 4-9 and use tax imposed by the endorsing municipality under Section 4-10 321.101(a), Tax Code, that is directly attributable, as determined 4-11 by the comptroller, to the preparation for and presentation of the 4-12 games and related events; and 4-13 (3) the incremental increase in the receipts collected 4-14 by the endorsing municipality from the municipality's hotel 4-15 occupancy tax imposed under Chapter 351, Tax Code, that is directly 4-16 attributable, as determined by the comptroller, to the preparation 4-17 for and presentation of the games and related events. 4-18 (c) For the purposes of Subsection (b)(1) of this section, 4-19 the comptroller shall designate as a market area for the games each 4-20 area in which the comptroller determines there is a reasonable 4-21 likelihood of measurable economic impact directly attributable to 4-22 the preparation for and presentation of the games and related 4-23 events, including areas likely to provide venues, accommodations, 4-24 and services in connection with the games based on the proposal 4-25 provided by the local organizing committee under Section 7 of this 4-26 Act. The comptroller shall determine the geographic boundaries of 5-1 each market area. The endorsing municipality that has been 5-2 selected as the site for the games must be included in a market 5-3 area for the games. 5-4 (d) Subject to Section 6 of this Act, the comptroller shall 5-5 retain, for the purpose of guaranteeing the joint obligations of 5-6 the state and the endorsing municipality under a games support 5-7 contract and this Act, the amount of municipal sales and use tax 5-8 revenue determined under Subsection (b)(2) of this section from the 5-9 amounts otherwise required to be sent to the municipality under 5-10 Section 321.502, Tax Code, beginning with the first distribution of 5-11 that tax revenue that occurs after the date the comptroller makes 5-12 the determination of the amount of municipal sales and use tax 5-13 revenue under Subsection (b)(2). The comptroller shall discontinue 5-14 retaining municipal sales and use tax revenue under this subsection 5-15 on the earlier of: 5-16 (1) the end of the third calendar month following the 5-17 month in which the closing event of the games occurs; or 5-18 (2) the date the amount of municipal sales and use tax 5-19 revenue and municipal hotel occupancy tax revenue in the Pan 5-20 American Games trust fund equals 14 percent of the maximum amount 5-21 of state and municipal tax revenue that may be deposited in the 5-22 trust fund under Subsection (m) of this section. 5-23 (e) In addition to municipal sales and use tax revenue 5-24 retained under Subsection (d) of this section, an endorsing 5-25 municipality may guarantee its obligations under a games support 5-26 contract and this Act by pledging surcharges from user fees, 6-1 including parking or ticket fees, charged in connection with 6-2 presentation of the games. 6-3 (f) Subject to Section 6 of this Act and Subsection (m) of 6-4 this section, the comptroller shall deposit into a trust fund 6-5 designated as the Pan American Games trust fund the amount of 6-6 municipal sales and use tax revenue retained under Subsection (d) 6-7 of this section and, at the same time, a portion of the state tax 6-8 revenue determined under Subsection (b)(1) of this section in an 6-9 amount equal to 6.25 times the amount of that municipal sales and 6-10 use tax revenue. Subject to Section 6 of this Act and Subsection 6-11 (m) of this section, the endorsing municipality shall deposit into 6-12 the trust fund the amount of the endorsing municipality's hotel 6-13 occupancy tax revenue determined under Subsection (b)(3) of this 6-14 section. The endorsing municipality shall deposit that hotel 6-15 occupancy tax revenue into the trust fund at least quarterly. When 6-16 the endorsing municipality makes a deposit of its hotel occupancy 6-17 tax revenue, the comptroller shall deposit at the same time a 6-18 portion of the state tax revenue determined under Subsection (b)(1) 6-19 of this section in an amount equal to 6.25 times the amount of that 6-20 municipal hotel occupancy tax revenue. The Pan American Games 6-21 trust fund is established outside the treasury but is held in trust 6-22 by the comptroller for the administration of this Act. Money in 6-23 the trust fund may be spent by the department without appropriation 6-24 only as provided by this Act. The comptroller shall discontinue 6-25 depositing into the trust fund any state tax revenue determined 6-26 under Subsection (b)(1) of this section on the earlier of: 7-1 (1) the end of the third calendar month following the 7-2 month in which the closing event of the games occurs; or 7-3 (2) the date on which the amount of state revenue in 7-4 the Pan American Games trust fund equals 86 percent of the maximum 7-5 amount of state and municipal tax revenue that may be deposited in 7-6 the trust fund under Subsection (m) of this section. 7-7 (g) The department may use the funds in the Pan American 7-8 Games trust fund only to fulfill joint obligations of the state and 7-9 the endorsing municipality to a site selection organization under a 7-10 games support contract or any other agreement providing assurances 7-11 from the department or the endorsing municipality to a site 7-12 selection organization. 7-13 (h) A local organizing committee shall provide information 7-14 required by the comptroller to enable the comptroller to fulfill 7-15 the comptroller's duties under this Act, including annual audited 7-16 statements of the local organizing committee's financial records 7-17 required by a site selection organization and data obtained by the 7-18 local organizing committee relating to attendance at the games and 7-19 to the economic impact of the games. A local organizing committee 7-20 must provide an annual audited financial statement required by the 7-21 comptroller not later than the end of the fourth month after the 7-22 date the period covered by the financial statement ends. 7-23 (i) The comptroller shall provide an estimate not later than 7-24 September 1, 1999, of the total amount of state and municipal tax 7-25 revenue that would be deposited in the Pan American Games trust 7-26 fund before January 1, 2008, if the games were to be held in this 8-1 state at a site selected pursuant to an application by a local 8-2 organizing committee. The comptroller shall provide the estimate 8-3 on request to a local organizing committee. A local organizing 8-4 committee may submit the comptroller's estimate to a site selection 8-5 organization. 8-6 (j) The department may not make a disbursement from the Pan 8-7 American Games trust fund unless the comptroller certifies that the 8-8 disbursement is for a purpose for which the state and the endorsing 8-9 municipality are jointly obligated under a games support contract 8-10 or other agreement described by Subsection (g) of this section. 8-11 (k) If the comptroller certifies under Subsection (j) of 8-12 this section that a disbursement may be made from the Pan American 8-13 Games trust fund, the obligation shall be satisfied first out of 8-14 municipal revenue deposited in the trust fund and any interest 8-15 earned on that municipal revenue. If the municipal revenue is not 8-16 sufficient to satisfy the entire deficit, state revenue deposited 8-17 into the trust fund and any interest earned on that state revenue 8-18 shall be used to satisfy the portion of the deficit not covered by 8-19 the municipal revenue. 8-20 (l) On January 1, 2009, the comptroller shall transfer to 8-21 the general revenue fund any money remaining in the Pan American 8-22 Games trust fund, not to exceed the amount of state revenue 8-23 remaining in the trust fund, plus any interest earned on that state 8-24 revenue. The comptroller shall remit to the endorsing municipality 8-25 any money remaining in the trust fund after the required amount is 8-26 transferred to the general revenue fund. 9-1 (m) In no event may: 9-2 (1) the total amount of state and municipal tax 9-3 revenue deposited in the Pan American Games trust fund exceed $20 9-4 million; or 9-5 (2) the joint liability of the state and the endorsing 9-6 municipality under a joinder agreement and any other games support 9-7 contracts entered into pursuant to this Act exceed the lesser of: 9-8 (A) $20 million; or 9-9 (B) the total amount of revenue deposited in the 9-10 Pan American Games trust fund and interest earned on the fund. 9-11 SECTION 5. GUARANTEE OF STATE AND MUNICIPAL OBLIGATIONS; 9-12 OLYMPIC GAMES TRUST FUND. (a) In this section: 9-13 (1) "Games" means the 2012 Olympic Games. 9-14 (2) "Site selection organization" means the United 9-15 States Olympic Committee or the International Olympic Committee. 9-16 (b) If a site selection organization selects a site for the 9-17 games in this state pursuant to an application by a local 9-18 organizing committee, after the first occurrence of a measurable 9-19 economic impact in this state as a result of the preparation for 9-20 the games, as determined by the comptroller, but in no event later 9-21 than one year before the scheduled opening event of the games, the 9-22 comptroller shall determine for each subsequent calendar quarter, 9-23 in accordance with procedures developed by the comptroller: 9-24 (1) the incremental increase in the receipts to the 9-25 state from the taxes imposed under Chapter 151, Tax Code, within 9-26 the market areas designated under Subsection (c) of this section, 10-1 that is directly attributable, as determined by the comptroller, to 10-2 the preparation for and presentation of the games and related 10-3 events; and 10-4 (2) the incremental increase in the receipts collected 10-5 by the state on behalf of the endorsing municipality from the sales 10-6 and use tax imposed by the endorsing municipality under Section 10-7 321.101(a), Tax Code, that is directly attributable, as determined 10-8 by the comptroller, to the preparation for and presentation of the 10-9 games and related events. 10-10 (c) For the purposes of Subsection (b)(1) of this section, 10-11 the comptroller shall designate as a market area for the games each 10-12 area in which the comptroller determines there is a reasonable 10-13 likelihood of measurable economic impact directly attributable to 10-14 the preparation for and presentation of the games and related 10-15 events, including areas likely to provide venues, accommodations, 10-16 and services in connection with the games based on the proposal 10-17 provided by the local organizing committee under Section 7 of this 10-18 Act. The comptroller shall determine the geographic boundaries of 10-19 each market area. The endorsing municipality that has been 10-20 selected as the site for the games must be included in a market 10-21 area for the games. 10-22 (d) Subject to Section 6 of this Act, the comptroller shall 10-23 retain, for the purpose of guaranteeing the joint obligations of 10-24 the state and the endorsing municipality under a games support 10-25 contract and this Act, the amount of municipal sales and use tax 10-26 revenue determined under Subsection (b)(2) of this section from the 11-1 amounts otherwise required to be sent to the municipality under 11-2 Section 321.502, Tax Code, beginning with the first distribution of 11-3 that tax revenue that occurs after the date the comptroller makes 11-4 the determination of the amount of municipal sales and use tax 11-5 revenue under Subsection (b)(2). The comptroller shall discontinue 11-6 retaining municipal sales and use tax revenue under this subsection 11-7 on the earlier of: 11-8 (1) the end of the third calendar month following the 11-9 month in which the closing event of the games occurs; or 11-10 (2) the date the amount of municipal sales and use tax 11-11 revenue in the Olympic Games trust fund equals 14 percent of the 11-12 maximum amount of state and municipal tax revenue that may be 11-13 deposited in the trust fund under Subsection (m) of this section. 11-14 (e) In addition to municipal sales and use tax revenue 11-15 retained under Subsection (d) of this section, an endorsing 11-16 municipality may guarantee its obligations under a games support 11-17 contract and this Act by pledging surcharges from user fees, 11-18 including parking or ticket fees, charged in connection with 11-19 presentation of the games. 11-20 (f) Subject to Section 6 of this Act and Subsection (m) of 11-21 this section, the comptroller shall deposit into a trust fund 11-22 designated as the Olympic Games trust fund the amount of municipal 11-23 sales and use tax revenue retained under Subsection (d) of this 11-24 section and, at the same time, a portion of the state tax revenue 11-25 determined under Subsection (b)(1) of this section in an amount 11-26 equal to 6.25 times the amount of that municipal sales and use tax 12-1 revenue. The trust fund is established outside the treasury but is 12-2 held in trust by the comptroller for the administration of this 12-3 Act. Money in the trust fund may be spent by the department 12-4 without appropriation only as provided by this Act. The 12-5 comptroller shall discontinue deposit of the amount of state tax 12-6 revenue determined under Subsection (b)(1) of this section on the 12-7 earlier of: 12-8 (1) the end of the third calendar month following the 12-9 month in which the closing event of the games occurs; or 12-10 (2) the date the amount of state revenue in the 12-11 Olympic Games trust fund equals 86 percent of the maximum amount of 12-12 state and municipal tax revenue that may be deposited in the trust 12-13 fund under Subsection (m) of this section. 12-14 (g) The department may use the funds in the Olympic Games 12-15 trust fund only to fulfill joint obligations of the state and the 12-16 endorsing municipality to a site selection organization under a 12-17 games support contract or any other agreement providing assurances 12-18 from the department or the endorsing municipality to a site 12-19 selection organization. 12-20 (h) A local organizing committee shall provide information 12-21 required by the comptroller to enable the comptroller to fulfill 12-22 the comptroller's duties under this Act, including annual audited 12-23 statements of the local organizing committee's financial records 12-24 required by a site selection organization and data obtained by the 12-25 local organizing committee relating to attendance at the games and 12-26 to the economic impact of the games. A local organizing committee 13-1 must provide an annual audited financial statement required by the 13-2 comptroller not later than the end of the fourth month after the 13-3 date the period covered by the financial statement ends. 13-4 (i) The comptroller shall provide an estimate before August 13-5 31, 2000, or as soon as practical after that date, of the total 13-6 amount of state and municipal tax revenue that would be deposited 13-7 in the Olympic Games trust fund if the games were to be held in 13-8 this state at a site selected pursuant to an application by a local 13-9 organizing committee. The comptroller shall provide the estimate 13-10 on request to a local organizing committee. A local organizing 13-11 committee may submit the comptroller's estimate to a site selection 13-12 organization. 13-13 (j) The department may not make a disbursement from the 13-14 Olympic Games trust fund unless the comptroller certifies that the 13-15 disbursement is for a purpose for which the state and the endorsing 13-16 municipality are jointly obligated under a games support contract 13-17 or other agreement described by Subsection (g) of this section. A 13-18 disbursement may not be made from the trust fund that the 13-19 department determines would be used for the purpose of soliciting 13-20 the relocation of a professional sports franchise located in this 13-21 state. 13-22 (k) If the comptroller certifies under Subsection (j) of 13-23 this section that a disbursement may be made from the Olympic Games 13-24 trust fund, the obligation shall be satisfied proportionately from 13-25 the state and municipal revenue in the trust fund. 13-26 (l) Two years after the closing event of the games, the 14-1 comptroller shall transfer to the general revenue fund any money 14-2 remaining in the Olympic Games trust fund, not to exceed the amount 14-3 of state revenue remaining in the trust fund, plus any interest 14-4 earned on that state revenue. The comptroller shall remit to the 14-5 endorsing municipality any money remaining in the trust fund after 14-6 the required amount is transferred to the general revenue fund. 14-7 (m) In no event may: 14-8 (1) the total amount of state and municipal tax 14-9 revenue deposited in the Olympic Games trust fund exceed $100 14-10 million; or 14-11 (2) the joint liability of the state and the endorsing 14-12 municipality under a joinder agreement and any other games support 14-13 contracts entered into pursuant to this Act exceed the lesser of: 14-14 (A) $100 million; or 14-15 (B) the total amount of revenue deposited in the 14-16 Olympic Games trust fund and interest earned on the fund. 14-17 SECTION 6. MUNICIPAL ELECTION. (a) Except as provided by 14-18 Subsection (b) of this section, an endorsing municipality must hold 14-19 an election in the municipality to determine whether the 14-20 municipality may contribute a portion of its sales and use taxes 14-21 and hotel occupancy taxes to the Pan American Games trust fund 14-22 under Section 4 of this Act or a portion of its sales and use taxes 14-23 to the Olympic Games trust fund under Section 5 of this Act, as 14-24 applicable to the games for which the municipality has authorized a 14-25 bid on its behalf. The election must be held on a uniform election 14-26 date that occurs after the effective date of this Act and before 15-1 the date a site selection organization requires the endorsing 15-2 municipality and the state to enter into a joinder undertaking 15-3 relating to the applicable games. 15-4 (b) An endorsing municipality authorizing a bid on its 15-5 behalf for the 2007 Pan American Games is not required to hold an 15-6 election under this section if there is not a sufficient number of 15-7 days between the effective date of this Act and a uniform election 15-8 date that occurs before the date a site selection organization 15-9 requires that the endorsing municipality and the state enter into a 15-10 joinder undertaking to allow the municipality to submit the 15-11 proposed election to the United States attorney general for 15-12 preclearance under Section 5 of the Voting Rights Act of 1965, as 15-13 amended (42 U.S.C. Section 1973c), at least 120 days before the 15-14 election. 15-15 (c) If an endorsing municipality is required to hold an 15-16 election under this section and the contribution of a portion of 15-17 the municipality's taxes to the Pan American Games trust fund or 15-18 Olympic Games trust fund, as applicable to the games for which the 15-19 endorsing municipality authorized a site selection bid on its 15-20 behalf, is not approved by a majority of the voters voting in the 15-21 election: 15-22 (1) the comptroller may not establish the Pan American 15-23 Games trust fund under Section 4 of this Act or the Olympic Games 15-24 trust fund under Section 5 of this Act, as applicable, may not 15-25 retain the municipality's municipal sales and use tax revenue under 15-26 Section 4(d) or 5(d) of this Act, as applicable, from amounts 16-1 otherwise required to be sent to that municipality under Section 16-2 321.502, Tax Code, and may not deposit any state tax revenue into 16-3 the trust fund; 16-4 (2) the comptroller is not required to determine the 16-5 incremental increase in state and municipal tax revenue under 16-6 Section 4(b) or 5(b) of this Act, as applicable; and 16-7 (3) the department may not enter into a games support 16-8 contract relating to the games for which the municipality has 16-9 authorized a bid on its behalf. 16-10 SECTION 7. ASSISTANCE OF DEPARTMENT AND OTHER STATE 16-11 AGENCIES. (a) The department shall review requests from a local 16-12 organizing committee that the department, on behalf of the state, 16-13 enter into a games support contract that is required by a site 16-14 selection organization in connection with the committee's bid to 16-15 host any of the games. 16-16 (b) A request made under Subsection (a) of this section must 16-17 be accompanied by: 16-18 (1) a general description and summary of the games for 16-19 which a site selection is sought by the local organizing committee; 16-20 (2) a preliminary and general description of the 16-21 proposal the local organizing committee intends to submit to a site 16-22 selection organization; 16-23 (3) the estimated cost of preparing and submitting the 16-24 intended proposal; 16-25 (4) the local organizing committee's intended method 16-26 of obtaining the funds needed for the purpose of preparing the 17-1 proposal; 17-2 (5) a description by type and approximate amount of 17-3 the site selection application costs that the local organizing 17-4 committee intends to pay; and 17-5 (6) any other information reasonably requested by the 17-6 department to assist it in reviewing the request. 17-7 (c) The department shall approve or deny a request made 17-8 under Subsection (a) of this section not later than the 30th day 17-9 after the date the request is submitted. 17-10 (d) The department may agree in a joinder undertaking 17-11 entered into with a site selection organization that the department 17-12 will: 17-13 (1) execute a joinder agreement if the site selection 17-14 organization selects a site in this state for the games; and 17-15 (2) refrain from taking any action after the execution 17-16 of the joinder undertaking that would impair its ability to execute 17-17 the joinder agreement. 17-18 (e) The department may agree in a joinder agreement that the 17-19 state will: 17-20 (1) provide or cause to be provided all of the 17-21 governmental funding, facilities, and other resources specified in 17-22 the local organizing committee's bid to host the games; 17-23 (2) be bound by the terms of, cause the local 17-24 organizing committee to perform, and guarantee performance of the 17-25 local organizing committee's obligations under contracts relating 17-26 to selecting a site in this state for the games; and 18-1 (3) be jointly liable with the local organizing 18-2 committee for: 18-3 (A) obligations of the local organizing 18-4 committee to a site selection organization, including obligations 18-5 indemnifying the site selection organization against claims of and 18-6 liabilities to third parties arising out of or relating to the 18-7 games; and 18-8 (B) any financial deficit relating to the games. 18-9 (f) The department may agree to execute a joinder 18-10 undertaking, a joinder agreement, or other games support contract 18-11 only if: 18-12 (1) the department determines that: 18-13 (A) the state's assurances and obligations under 18-14 the undertaking, agreement, or contract are reasonable; and 18-15 (B) any financial commitments of the state will 18-16 be satisfied exclusively by recourse to the Pan American Games 18-17 trust fund or the Olympic Games trust fund, as applicable; and 18-18 (2) the endorsing municipality has executed an 18-19 agreement with a site selection organization that contains 18-20 substantially similar terms. 18-21 (g) Before executing a games support contract, the 18-22 department must execute an agreement with the applicable local 18-23 organizing committee requiring that if a site selection 18-24 organization selects a site for the games in this state pursuant to 18-25 an application by the local organizing committee, the local 18-26 organizing committee will repay the state any funds expended by the 19-1 department under this Act from any surplus of the local organizing 19-2 committee's funds remaining after the presentation of the games and 19-3 after the payment of the expenses and obligations incurred by the 19-4 local organizing committee. 19-5 (h) A games support contract may contain any additional 19-6 provisions the department requires in order to carry out the 19-7 purposes of this Act. 19-8 (i) The department may require a local organizing committee 19-9 to list the state as an additional insured on any policy of 19-10 insurance purchased by the local organizing committee and required 19-11 by a site selection organization to be in effect in connection with 19-12 the games. 19-13 (j) The Texas Department of Transportation, the Department 19-14 of Public Safety of the State of Texas, and the Texas Department of 19-15 Housing and Community Affairs may: 19-16 (1) assist a local organizing committee in developing 19-17 applications and planning for the games; and 19-18 (2) enter into contracts, agreements, or assurances 19-19 related to the presentation of the games. 19-20 (k) Notwithstanding any other provision of this Act, the 19-21 department may not obligate the state to pay or otherwise provide 19-22 funds to cover the costs of the construction or purchase of a 19-23 building or other facility by a municipality. 19-24 SECTION 8. APPLICATION OF OPEN MEETINGS AND OPEN RECORDS 19-25 LAWS. (a) A local organizing committee and its governing body are 19-26 subject to Chapters 551 and 552, Government Code. For purposes of 20-1 those chapters, the governing body of a local organizing committee 20-2 is considered a governmental body as defined by those chapters. 20-3 For purposes of Chapter 552, Government Code, the records and 20-4 information of a local organizing committee are considered public 20-5 records and public information. 20-6 (b) A final bid that is submitted by a local organizing 20-7 committee to a site selection organization, or a draft of that bid, 20-8 is excepted from required public disclosure under Chapter 552, 20-9 Government Code, until the applicable site selection organization 20-10 selects the site for the applicable games. 20-11 (c) Chapter 551, Government Code, does not apply to a 20-12 meeting of a subcommittee of the governing body of a local 20-13 organizing committee if: 20-14 (1) the subcommittee consists of not more than five 20-15 members; 20-16 (2) the meeting is not held in a public building; 20-17 (3) the subcommittee makes a tape recording of the 20-18 proceedings of the meeting in compliance with Section 551.103, 20-19 Government Code, and the local organizing committee preserves the 20-20 tape recording for two years from the date the recording is made; 20-21 (4) the subcommittee does not discuss or decide any 20-22 financial matters during the meeting; and 20-23 (5) any decision made by the subcommittee will not 20-24 become effective without being reviewed and officially adopted by 20-25 the governing body of the local organizing committee at a meeting 20-26 held in compliance with Chapter 551, Government Code. 21-1 (d) A tape recording made under Subsection (c) of this 21-2 section is subject to required public disclosure in the manner 21-3 prescribed by Chapter 552, Government Code, for a public record. 21-4 SECTION 9. TAX EXEMPTIONS FOR LOCAL ORGANIZING COMMITTEE. 21-5 (a) A local organizing committee that is exempt from paying 21-6 federal income tax under Section 501(c), Internal Revenue Code of 21-7 1986, as amended, is exempt from: 21-8 (1) the sales, excise, and use taxes imposed under 21-9 Chapter 151, Tax Code; 21-10 (2) taxes on the sale, rental, or use of a motor 21-11 vehicle imposed under Chapter 152, Tax Code; 21-12 (3) the hotel occupancy tax imposed under Chapter 156, 21-13 Tax Code; and 21-14 (4) the franchise tax imposed under Chapter 171, Tax 21-15 Code. 21-16 (b) The exemptions provided by Subsections (a)(1), (2), and 21-17 (3) of this section take effect on the first day of the first month 21-18 after the effective date of this Act. The exemption provided by 21-19 Subsection (a)(4) of this section applies only to a tax imposed 21-20 under Chapter 171, Tax Code, that becomes due on or after the 21-21 effective date of this Act. 21-22 SECTION 10. ETHICS. (a) A local organizing committee that 21-23 submits a request under Section 7(a) of this Act must: 21-24 (1) affirm as a part of that request that it is fully 21-25 in compliance with the ethical guidelines set forth in all 21-26 contracts entered into and rules adopted by the applicable site 22-1 selection organization, including the site selection organization's 22-2 requirements regarding disclosure of any financial interest by a 22-3 director, officer, or senior-level employee of the local organizing 22-4 committee in any proposed transaction with the local organizing 22-5 committee; 22-6 (2) not later than the 15th day of the first month 22-7 following each calendar quarter, file with the secretary of the 22-8 endorsing municipality for which the local organizing committee 22-9 submits a request: 22-10 (A) a certification that the local organizing 22-11 committee continues to be in compliance with the ethical guidelines 22-12 described by Subdivision (1) of this subsection; and 22-13 (B) a report of contributions to and 22-14 expenditures by the local organizing committee in the manner 22-15 described by Subsection (b) of this section; and 22-16 (3) file with the secretary of the endorsing 22-17 municipality on April 15 of each year a copy of each financial 22-18 statement required to be submitted by a local organizing committee 22-19 or a member of a local organizing committee to the United States 22-20 Olympic Committee during the preceding calendar year. 22-21 (b) A report made under Subsection (a)(2)(B) of this section 22-22 must include: 22-23 (1) for each contribution made to a local organizing 22-24 committee: 22-25 (A) the contributor's full name and address; 22-26 (B) the date of the contribution; 23-1 (C) whether the contribution is cash, made by 23-2 check, or in-kind; and 23-3 (D) the amount or market value of the 23-4 contribution; and 23-5 (2) for each expenditure made by a local organizing 23-6 committee: 23-7 (A) the full name and address of the person who 23-8 receives payment of the expenditure; 23-9 (B) the date of the expenditure; 23-10 (C) the purpose of the expenditure; and 23-11 (D) the amount of the expenditure. 23-12 (c) The endorsing municipality for which a local organizing 23-13 committee submits a request under Section 7(a) of this Act must 23-14 have a comprehensive ethics code establishing standards of conduct, 23-15 disclosure requirements, and enforcement mechanisms relating to 23-16 city officials and employees before the department may consider the 23-17 request. 23-18 SECTION 11. BRIBERY. (a) A person commits an offense if 23-19 the person intentionally or knowingly offers, confers, or agrees to 23-20 confer on another person, or solicits, accepts, or agrees to accept 23-21 from another person, any benefit as consideration for the 23-22 recipient's decision, opinion, recommendation, vote, or other 23-23 exercise of discretion as a member or employee of a local 23-24 organizing committee or site selection organization. 23-25 (b) It is a defense to prosecution under Subsection (a) of 23-26 this section that the benefit conferred is a meal or entertainment 24-1 reported under Section 10(a)(2)(B) of this Act. 24-2 (c) It is not a defense to prosecution under Subsection (a) 24-3 of this section that a person whom the actor sought to influence 24-4 was not qualified to act as the actor intended the person to act. 24-5 (d) It is not a defense to prosecution under Subsection (a) 24-6 of this section that the benefit is not offered or conferred or 24-7 that the benefit is not solicited or accepted until after: 24-8 (1) the decision, opinion, recommendation, vote, or 24-9 other exercise of discretion has occurred; or 24-10 (2) the person whom the actor sought to influence is 24-11 no longer a member of the local organizing committee or a site 24-12 selection organization. 24-13 (e) In this section, "benefit" has the meaning assigned by 24-14 Section 36.01, Penal Code. 24-15 (f) An offense under this section is a felony of the second 24-16 degree. 24-17 SECTION 12. EMERGENCY. The importance of this legislation 24-18 and the crowded condition of the calendars in both houses create an 24-19 emergency and an imperative public necessity that the 24-20 constitutional rule requiring bills to be read on three several 24-21 days in each house be suspended, and this rule is hereby suspended. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 456 passed the Senate on April 8, 1999, by the following vote: Yeas 22, Nays 8; and that the Senate concurred in House amendments on May 28, 1999, by the following vote: Yeas 30, Nays 0. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 456 passed the House, with amendments, on May 22, 1999, by a non-record vote. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor