Chapter 808 Oregon Laws 2003

AN ACT

SB 5

Relating to state finance; appropriating money; limiting expenditures; and prescribing an effective date.

Be It Enacted by the People of the State of Oregon:

SECTION 1. (1) As used in sections 1 to 4 of this 2003 Act:

(a) “Incremental baseball tax revenues” means:

(A) The Oregon personal income tax revenues that are generated from the Oregon personal income tax liabilities shown on the income tax returns filed by the members of a professional athletic team engaged in Major League Baseball, including revenues that are generated from the tax liabilities of spouses of members of a professional athletic team engaged in Major League Baseball if the tax liabilities are reported on a joint return; or

(B) If Oregon personal income tax rates are reduced after the dates of the grant agreements described in section 2 of this 2003 Act and the grant agreements provide that payments will be based on rates in effect when the grant agreements are executed, the Oregon personal income tax liabilities, as described in subparagraph (A) of this paragraph, that would have been due if the liabilities were calculated using personal income tax rates in effect on the date of execution of the grant agreements.

(b) “Major league stadium” means a baseball stadium located in the City of Portland that is designed for use by a Major League Baseball team and that has an estimated cost of $300 million or more.

(c) “Member of a professional athletic team” means an athlete or other individual rendering service to a professional athletic team if the compensation of the athlete or other individual exceeds $50,000 in a tax year.

(d) “Tax liabilities” means the tax determined under ORS chapter 316 for the tax year less the credits allowed for purposes of ORS chapter 316 for the tax year.

(2) The Department of Revenue may adopt administrative rules that the department determines are necessary to:

(a) Further define the terms defined in this section in a manner consistent with this section;

(b) Implement the duties of the department under sections 1 to 4 of this 2003 Act; and

(c) Carry out the purposes of sections 1 to 4 of this 2003 Act.

SECTION 1a. The Legislative Assembly finds and declares that the construction of a major league stadium and the location of a Major League Baseball franchise in Portland will bring jobs and economic development to Oregon and will benefit Oregon workers and businesses.

SECTION 2. (1) The Director of the Oregon Department of Administrative Services, with the approval of the State Treasurer, may enter into one or more agreements on behalf of the State of Oregon to grant the incremental baseball tax revenues for a period of not more than 30 years. The grant agreements must:

(a) Provide that the granted amounts may be used only to pay for the costs of financing, developing, constructing and furnishing a major league stadium;

(b) Provide that:

(A) The total payments to the grantees are limited so that the grantees do not receive, in the aggregate, more than $150 million for costs of developing, constructing and furnishing a major league stadium, plus the actual, reasonable financing costs incurred by the grantees for that amount; and

(B) If the incremental baseball tax revenues in a year substantially exceed the amount reasonably required to amortize a loan of $150 million over a period of 30 years with interest, the excess may be retained by the state;

(c) Terminate when:

(A) The State of Oregon has made all payments assigned to the state in the grant agreements for the costs allowed under this subsection; and

(B) The grantees have returned any amounts required to be returned under paragraph (i) of this subsection;

(d) Require the Director of the Department of Revenue to estimate incremental baseball tax revenues, specify the methodology for estimating incremental baseball tax revenues and notify the Director of the Oregon Department of Administrative Services of the estimated incremental baseball tax revenues;

(e) Specify the methodology for determining actual incremental baseball tax revenues;

(f) Require the Director of the Oregon Department of Administrative Services to request that the Legislative Assembly appropriate an amount equal to the estimated incremental baseball tax revenues from the General Fund to the Major League Stadium Grant Fund established in section 4 of this 2003 Act so that those moneys may be disbursed under the grant agreements authorized by this section;

(g) Require the Director of the Department of Revenue to determine the actual incremental baseball tax revenues and, if the actual incremental baseball tax revenues exceed the estimated incremental baseball tax revenues, notify the Director of the Oregon Department of Administrative Services of the excess;

(h) Require the Director of the Oregon Department of Administrative Services, if notified of an excess under paragraph (g) of this subsection, to request that the Legislative Assembly appropriate an amount equal to the excess, adjusted for the limits and retentions described in paragraph (b) of this subsection, from the General Fund to the Major League Stadium Grant Fund so that those moneys may be disbursed under the grant agreements authorized by this section;

(i) Require the grantees to return to the Director of the Oregon Department of Administrative Services for deposit in the General Fund amounts transferred to the grantees from the Major League Stadium Grant Fund that exceed the actual incremental baseball tax revenues;

(j) Provide that the amounts requested for appropriations may not be reduced because of any reduction that may be enacted in Oregon personal income tax rates;

(k) Require the Director of the Oregon Department of Administrative Services to disburse amounts in the Major League Stadium Grant Fund to the grantees on particular dates;

(L) Provide assurances of full and fair participation in the construction, furnishing and operation of the major league stadium by women, minorities and small businesses;

(m) Provide for the maximization of economic benefits for Oregon workers in the construction, furnishing and operation of the major league stadium to the greatest extent permitted by law; and

(n) Require the State of Oregon and the grantees to take any other action that the State Treasurer, the Director of the Oregon Department of Administrative Services or the Director of the Department of Revenue determines is desirable to ensure that:

(A) The granted funds are used for the purposes described in sections 1 to 4 of this 2003 Act;

(B) The grant agreements are administered efficiently and the interests of the State of Oregon are protected; and

(C) The requests for appropriation of amounts equal to the incremental baseball tax revenues are made as described in sections 1 to 4 of this 2003 Act.

(2) The obligation of the State of Oregon, under sections 1 to 4 of this 2003 Act and the grant agreements authorized by this section, to transfer estimated or actual incremental baseball tax revenues to the Major League Stadium Grant Fund is subject to an appropriation being made for that purpose by the Legislative Assembly. The State of Oregon is not liable to any party for any reason if the Legislative Assembly fails to appropriate all or a portion of the amounts requested under subsection (1)(f) and (h) of this section to the Major League Stadium Grant Fund. However, if the Legislative Assembly does appropriate amounts for deposit in the Major League Stadium Grant Fund and those amounts are deposited in the Major League Stadium Grant Fund pursuant to the grant agreements authorized by this section, the obligation of the State of Oregon to disburse the amounts in the Major League Stadium Grant Fund is unconditional. The grant agreements authorized by this section are not a pledge of the full faith and credit or the taxing power of the State of Oregon, and the State of Oregon does not pledge its full faith and credit or taxing power. The grant agreements do not create an indebtedness of the State of Oregon in violation of section 7, Article XI of the Oregon Constitution. If a provision of a grant agreement is construed to have the effect of creating a debt in violation of section 7, Article XI of the Oregon Constitution, the provision is void.

(3) The Legislative Assembly does not have a legal obligation to appropriate any amounts for disbursement under the grant agreements authorized by this section. However, the Legislative Assembly declares its current intention to appropriate amounts equal to the estimated incremental baseball tax revenues and amounts equal to the amount by which the actual incremental baseball tax revenues exceed the estimated incremental baseball tax revenues from the General Fund to the Major League Stadium Grant Fund, as provided in sections 1 to 4 of this 2003 Act, so that the amounts may be disbursed pursuant to the grant agreements authorized by this section.

(4) Before commencing negotiations on a grant agreement authorized by this section, the Oregon Department of Administrative Services shall obtain one or more agreements from benefited parties to pay the state’s costs associated with negotiating and executing the grant agreement.

SECTION 3. The Director of the Oregon Department of Administrative Services may not execute a grant agreement authorized by section 2 of this 2003 Act until the director has determined that:

(1) The City of Portland has made a written request to the director to execute and deliver the grant agreement;

(2) A Major League Baseball franchise has agreed to locate and be based in Portland and has entered into a legally binding commitment to remain in Portland for at least the term of the grant agreement;

(3) All funding to build the major league stadium that is not based on the grant agreement has been committed;

(4) No grantee is both a public body and a guarantor for the repayment of bonds or other indebtedness that is to be repaid through use of grant moneys;

(5) The Oregon Department of Administrative Services has provided a written report regarding the estimated and actual incremental baseball tax revenues to, and has solicited comments from, the advisory committee described in subsection (6) of this section relating to the following provisions of the proposed grant agreement:

(a) The methodology for estimating the incremental baseball tax revenues;

(b) The methodology for determining the actual incremental baseball tax revenues; and

(c) The requirement that estimated and actual incremental baseball tax revenues be based on the Oregon personal income tax rates in effect when the grant agreement is executed or for the period for which the taxes are collected, whichever is greater, even if those rates are subsequently reduced; and

(6) An advisory committee, consisting of two legislators appointed by the President of the Senate, two legislators appointed by the Speaker of the House of Representatives and one person appointed by the Governor, has reviewed the provisions of the proposed grant agreement listed in subsection (5) of this section.

SECTION 4. The Major League Stadium Grant Fund is established in the State Treasury, separate and distinct from the General Fund. Amounts in the fund are continuously appropriated to the Oregon Department of Administrative Services for the purpose of making the grants required by the grant agreements entered into under section 2 of this 2003 Act and paying the costs and expenses of the State Treasurer, the Oregon Department of Administrative Services and the Department of Revenue in connection with the implementation and administration of sections 1 to 4 and 6 to 8a of this 2003 Act. Interest earned by the Major League Stadium Grant Fund must be credited to the fund.

SECTION 5. Sections 6 to 8a of this 2003 Act are added to and made a part of ORS 316.162 to 316.212.

SECTION 6. (1) As used in sections 6 to 8a of this 2003 Act:

(a) “Duty days” means the days during the tax year from the beginning of the official preseason training period of a professional athletic team through the last game in which the professional athletic team competes or is scheduled to compete during the tax year.

(b) “Member of a professional athletic team” means an athlete or other individual rendering service to a professional athletic team if the compensation of the athlete or other individual exceeds $50,000 in a tax year.

(2) The Department of Revenue may further define by rule the terms defined in this section in a manner consistent with this section.

SECTION 7. (1) A person who transacts business in the State of Oregon and who pays wages, salary, bonuses or other taxable income to a member of a professional athletic team, in lieu of the withholding requirements under ORS 316.167, shall withhold eight percent of the income as provided in this section and by rule of the Department of Revenue.

(2) The person withholding amounts under this section shall pay the amounts withheld to the Department of Revenue at the time and in the manner prescribed by the department by rule.

(3) If the member of a professional athletic team is a resident of the State of Oregon, all compensation paid to the member, whether or not attributable to duty days, is subject to withholding under this section.

(4) If the member of a professional athletic team is not a resident of the State of Oregon, a portion of the compensation paid to the member is subject to withholding under this section. The portion subject to withholding is that portion of compensation received for the tax year that bears the same ratio to total compensation received for the tax year as the number of duty days within this state bears to the total number of duty days spent both within and outside this state during the tax year.

(5) Notwithstanding the description of the portion of compensation subject to withholding in subsection (4) of this section, the Department of Revenue may provide by rule alternative methodologies for determining the portion of compensation subject to withholding under this section that the department determines to be fair and equitable.

SECTION 8. (1) In addition to other reports and returns required by law or rule, a person required to withhold compensation under section 7 of this 2003 Act shall file an annual report with the Department of Revenue reporting:

(a) The total amount of compensation paid during the year to the members of the professional athletic team for which the report is being made.

(b) A roster of the members of the professional athletic team for which the report is being made who were members at any time during the year, that lists for each member:

(A) A taxpayer identification number;

(B) Compensation paid to the member; and

(C) The number of duty days in this state and the total number of duty days for the year.

(c) The amount withheld under section 7 of this 2003 Act for the year.

(d) Other information the department may require by rule.

(2) The report must be filed with the department on or before April 15 following the year for which the report is being made or at another time as the department may require by rule.

SECTION 8a. (1) The Department of Revenue may adopt administrative rules the department determines are necessary to:

(a) Implement the duties of the department under sections 6 to 8a of this 2003 Act; and

(b) Carry out the purposes of sections 6 to 8a of this 2003 Act.

(2) The rules may include, but are not limited to:

(a) Rules providing alternative methodologies for determining the portion of compensation subject to withholding under section 7 (4) of this 2003 Act that the department determines to be fair and equitable; and

(b) Rules construing ORS 316.162 to 316.212 in a manner that is consistent and compatible with the withholding provisions of sections 6 to 8a of this 2003 Act.

SECTION 9. Notwithstanding any other law limiting expenditures, the amount of $1 is established for the biennium beginning July 1, 2003, as the maximum limit for payment by the Oregon Department of Administrative Services from the Major League Stadium Grant Fund of amounts required under the grant agreements authorized in section 2 of this 2003 Act.

SECTION 10. Notwithstanding any other law limiting expenditures, the amount of $1 is established for the biennium beginning July 1, 2003, as the maximum limit for payment by the Oregon Department of Administrative Services from the Major League Stadium Grant Fund of the costs and expenses of the State Treasurer, the Oregon Department of Administrative Services and the Department of Revenue to implement and administer sections 1 to 4 and 6 to 8a of this 2003 Act.

SECTION 11. Notwithstanding any other provision of law, a transfer or deposit into the Major League Stadium Grant Fund established under section 4 of this 2003 Act may not be made prior to July 1, 2005.

SECTION 12. This 2003 Act takes effect on the 91st day after the date on which the regular session of the Seventy-second Legislative Assembly adjourns sine die.

Approved by the Governor September 24, 2003

Filed in the office of Secretary of State September 24, 2003

Effective date November 26, 2003

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