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S.J.R. 11

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OLYMPIC FACILITIES REPAYMENT RESOLUTION

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1997 GENERAL SESSION

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STATE OF UTAH

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Sponsor: Alarik Myrin

5    A JOINT RESOLUTION OF THE LEGISLATURE PERMITTING THE TRANSFER OF THE
6    WINTER SPORTS PARK TO OCCUR PRIOR TO APRIL 1999; AND ADDRESSING THE
7    STATE'S SECURITY INTEREST IN REVENUES RECEIVED BY THE ORGANIZING
8    COMMITTEE.
9    Be it resolved by the Legislature of the state of Utah:
10        WHEREAS as used in this resolution:
11        (1) "organizing committee" means the Salt Lake Organizing Committee for the Winter
12    Olympic Games of 2002;
13        (2) "Olympics" means the Olympic Winter Games of 2002 to be hosted by Salt Lake City;
14    and
15        (3) "revenues" means all revenues scheduled to be paid to the organizing committee under
16    any contract into which the committee may enter including proceeds payable under insurance
17    contracts;
18        WHEREAS S.J.R. 17 (1994 General Session) governs the sale of the Winter Sports Park
19    and the payment of the purchase price of up to $99 million depending on the actual total funds
20    expended or incurred by the Utah Sports Authority through the closing date referred to in the
21    August 1, 1994 Winters Sports Facility Purchase Agreement, except to the extent that a specific
22    requirement of S.J.R. 17 is superseded by a subsequent joint resolution of the Legislature;
23        WHEREAS on August 1, 1994, the Utah Sports Authority entered into an agreement to sell
24    the Winter Sports Park to the organizing committee for a purchase price of up to $99 million,
25    which agreement was affirmed by S.J.R. 5 (1996 General Session);
26        WHEREAS under the sales agreement the organizing committee is to take possession and
27    title of the Winter Sports Park in April 1999;


1        WHEREAS under the sales agreement the sale of the Winter Sports Park was conditioned
2    on the organizing committee providing the Utah Sports Authority, as an agency of the state, a first
3    priority security interest in the last $100,000,000 of revenues to which the organizing committee
4    may be entitled under any contract into which the organizing committee may enter with a
5    television network or other party relating to the right to broadcast, transmit, record or sell video
6    images or other forms of communications or media related to the Olympics in addition to other
7    security interests given the Utah Sports Authority;
8        WHEREAS the organizing committee may need to take possession and title of the Winter
9    Sports Park prior to April 1999 to meet construction schedules for improvements the organizing
10    committee will make to the Winter Sports Park;    
11        WHEREAS the terms of the largest television contract have been negotiated and the
12    organizing committee has a more definite understanding of the revenues it will receive from the
13    broadcast of the Olympics;
14        WHEREAS because the organizing committee will receive a significant portion of its
15    revenues during or after the Olympics, the organizing committee needs to establish one or more
16    revolving or other lines of credit to pay for the costs incurred prior to the Olympics in preparing
17    for and hosting the Olympics;
18        WHEREAS to secure one or more lines of credit, the organizing committee may be
19    required to give a security interest in revenues to an institution or institutions that provide the
20    organizing committee one or more revolving or other lines of credit;
21        WHEREAS the state's security interest should reflect its status as the second largest
22    creditor of the organizing committee, second only to the institution or institutions that will provide
23    the organizing committee one or more revolving or other lines of credit;
24        WHEREAS if the organizing committee is able to obtain one or more lines of credit under
25    favorable terms, the state will benefit because the organizing committee will be financially more
26    secure and able to meet its budgetary obligations including the repayment of the purchase price;
27    and
28        WHEREAS it will benefit the organizing committee's efforts to obtain one or more lines
29    of credit if the state's security interest in revenues is more specifically defined:
30        NOW, THEREFORE, BE IT RESOLVED that the closing of the August 1, 1994 Winter
31    Sports Facility Purchase Agreement may occur prior to April 15, 1999, on a date to be mutually

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1    decided by the organizing committee and the Utah Sports Authority resulting in the organizing
2    committee taking title and possession of the Winter Sports Park prior to April 1999.
3        BE IT FURTHER RESOLVED that, if the conditions of this resolution are met, the state's
4    security interest in the revenues received by the organizing committee, to be held by the Utah
5    Sports Authority or its successor entity as an agency of the state, shall be as follows:
6        (1) except as limited by this resolution, an institution or institutions providing the
7    organizing committee with one or more revolving or other lines of credit may receive a first
8    priority security interest in revenues that has priority over the state's security interest in those
9    revenues;
10        (2) the aggregate of all revolving or other lines of credit secured by the organizing
11    committee may not exceed $200,000,000 without the approval of the governor;
12        (3) as to the revenues in which the organizing committee pledges a security interest to an
13    institution or institutions providing the organizing committee one or more lines of credit, the state
14    has a security interest in the revenues pledged that is:
15        (a) junior in lien priority to any lien or security interest granted the institution or
16    institutions providing the organizing committee with one or more revolving or other lines of credit;
17    and
18        (b) superior in lien priority to any lien or security interest of any creditor other than an
19    institution or institutions described in Subsection (1);
20        (4) for revenues not pledged to an institution or institutions providing the organizing
21    committee one or more revolving or other lines of credit, the Utah Sports Authority shall enter into
22    an agreement with the organizing committee, subject to the approval of the governor, that grants
23    the state a first priority security interest in:
24        (a) $100,000,000 of revenues not pledged under Subsection (3); or
25        (b) if the revenues not pledged under Subsection (3) are less than $100,000,000, the entire
26    amount of revenues not pledged under Subsection (3);
27        (5) the lien and security interest granted to the state in accordance with this resolution does
28    not restrict the organizing committee's right or ability to expend any available funds, including the
29    proceeds of the lines of credit or revenues pledged to the state or to an institution or institutions
30    extending the lines of credit, so long as the expenditures are:
31        (a) permitted under the agreement between the organizing committee and an institution or

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1    institutions providing the revolving or other lines of credit to the organizing committee; and
2        (b) in accordance with budgets approved by the governor under Utah Code Ann.
3    63A-7-106 and the August 1, 1994 Winter Sports Facility Purchase Agreement;
4        (6) other than the security interests held by the state and an institution or institutions
5    granting a line or lines of credit in accordance with this resolution, the organizing committee may
6    not grant liens or security interests on or otherwise pledge or encumber its assets without the
7    consent of the governor, except for the following:
8        (a) liens for taxes not yet due and payable or that are being contested in good faith in
9    appropriate proceedings;
10        (b) mechanics, materialmen's, carriers', warehousemen's, and similar liens arising by
11    operations of law in the ordinary course of business that are not overdue or being contested in good
12    faith by appropriate proceedings;
13        (c) liens arising in connection with workers' compensation, unemployment insurance, old
14    age pensions, and social security benefits that are not overdue or are being contested in good faith
15    in appropriate proceedings;
16        (d) purchase money security interest and other liens existing on any assets or property
17    acquired by the organizing committee; and
18        (e) liens incurred or deposits made in the ordinary course of business to secure
19    performance of bids, tenders, statutory obligations, fee and expense arrangements with trustees and
20    fiscal agents, and liens to secure surety, indemnity performance, appeal and release bonds,
21    provided such do not exceed individually or in the aggregate $5,000,000 at any time outstanding;
22        (7) the organizing committee shall provide the Legislature, through the Office of
23    Legislative Research and General Counsel, the governor, and the Utah Sports Authority the
24    following, which shall be treated as a protected record under Title 63, Chapter 2, Governments
25    Records Access and Management Act:
26        (a) a report of the terms of any lines of credit entered into by the organizing committee;
27        (b) a copy of any security agreement related to the revenues of the organizing committee;
28    and
29        (c) notice of any event of default required to be provided an institution or institutions
30    extending the organizing committee a line or lines of credit; and
31        (8) the organizing committee shall enter into, consistent with this resolution, an

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1    amendment to the August 1, 1994 Winter Sports Facility Purchase Agreement to reflect the
2    security interest described in this resolution, except that the Utah Sports Authority may not enter
3    into the amendment prior to:
4        (a) ten business days after the Utah Sports Authority provides the Legislature, through the
5    Office of Legislative Research and General Counsel, a copy of the amendment; and
6        (b) receiving the written approval of the amendment by the governor.
7        BE IT FURTHER RESOLVED that this resolution governs the security interest of the state
8    in the organizing committee's revenues and any agreement affecting the security interest of the
9    state that is in conflict with this resolution is null and void, unless the conflicting agreement is
10    approved by a joint resolution of the Utah Legislature.
11        BE IT FURTHER RESOLVED that the Utah Sports Authority shall execute such other
12    agreements and take such further actions consistent with this resolution as may be required by the
13    institution or institutions extending the organizing committee a line or lines of credit to evidence
14    subordination and subrogation of the state's security interest to the security interest of such
15    institution or institutions.




Legislative Review Note
    as of 3-3-97 4:41 PM


A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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