PRINTER'S NO. 4024
No. 2896 Session of 1998
INTRODUCED BY WALKO, WOJNAROSKI, LAUGHLIN, MICHLOVIC, HARHAI,
ROBINSON, LEVDANSKY, BELARDI, DeLUCA, TRELLO, OLASZ, BISHOP
AND THOMAS, OCTOBER 13, 1998
REFERRED TO COMMITTEE ON TOURISM AND RECREATIONAL DEVELOPMENT,
OCTOBER 13, 1998
AN ACT
1 Providing for shared equity financing of professional sports
2 organizations; and conferring powers and duties on the
3 Department of Community and Economic Development.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Shared Equity
8 Sports Contribution Act.
9 Section 2. Declaration of policy.
10 The General Assembly finds and declares as follows:
11 (1) Public funds are often used to aid sports
12 organizations.
13 (2) There should be some accountability for those
14 expenditures.
15 Section 3. Definitions.
16 The following words and phrases when used in this act shall
17 have the meanings given to them in this section unless the
1 context clearly indicates otherwise:
2 "Appreciated amount." The difference between:
3 (1) subsequent value; and
4 (2) base value.
5 "Base value." The fair market value of a sports organization
6 on the date of application for capital sports financing, as
7 determined by an independent appraiser nationally recognized for
8 expertise in the valuation of sports organizations.
9 "Capital sports cost." The cost necessary to construct,
10 maintain or improve a facility.
11 Capital sports financing." A capital budget appropriation to
12 assist any municipality, municipal authority, sports
13 organization or other entity with a capital sports cost.
14 "Department." The Department of Community and Economic
15 Development of the Commonwealth.
16 "Facility." A place where a professional sporting event is
17 conducted by a sports organization.
18 "Host municipality." A municipality in which a facility is
19 located at the time of application for capital sports financing.
20 "Sharing condition." Any of the following which occur after
21 capital sports financing is utilized:
22 (1) Transfer, with or without consideration, of more
23 than 50% of the assets of a sports organization.
24 (2) Transfer, with or without consideration, of more
25 than 50% of the equity of a sports organization.
26 (3) Relocation of the sports organization's facility so
27 that events involving the professional sports franchise of
28 the sports organization are exhibited in a municipality other
29 than the host municipality.
30 "Sports organization." A sole proprietorship, partnership,
19980H2896B4024 - 2 -
1 association or corporation that:
2 (1) owns a professional sports franchise; and
3 (2) exhibits events involving that professional sports
4 franchise at a facility.
5 "Subsequent value." The fair market value of a sports
6 organization on the date of occurrence of a sharing condition,
7 as determined by an independent appraiser nationally recognized
8 for expertise in the valuation of sports organizations.
9 Section 4. Department.
10 The department has the following powers and duties:
11 (1) To enter into agreements under section 5(a).
12 (2) To enforce equity sharing under section 5(b).
13 Section 5. Capital sports financing.
14 (a) Agreement.--If sports financing is utilized, the
15 department shall enter into an agreement with a sports
16 organization and a host municipality.
17 (b) Equity sharing.--The agreement under subsection (a) must
18 require a sports organization to do all of the following:
19 (1) Agree in compliance with section 1 of the act of May
20 13, 1927 (P.L.985, No.475), known as the Uniform Written
21 Obligations Act, to do all of the following upon the
22 occurrence of a sharing condition:
23 (i) Pay to the Commonwealth the greater of:
24 (A) The percentage of the appreciated amount
25 which the capital sports financing bears to the
26 capital sports cost; or
27 (B) 5% of the base value.
28 (ii) Pay to the host municipality the greater of:
29 (A) the percentage of the appreciated amount
30 which the capital sports financing bears to the
19980H2896B4024 - 3 -
1 capital sports cost; or
2 (B) 5% of the base value.
3 (2) Post bond for the performance of obligations under
4 paragraph (1) which is:
5 (i) satisfactory to the department; and
6 (ii) in the amount of 20% of the base value.
7 Section 6. Effective date.
8 This act shall take effect in 60 days.
F3L04VDL/19980H2896B4024 - 4 -