Oregon
Ballpark Financing -- SB 5 (formerly HB 3606)
Passage of SB 5 established the framework for the use of
construction bonds to cover up to $150 million of the construction cost of an
Oregon major league baseball ballpark and authorized the use of incremental
baseball income tax revenues from home and visiting player salaries, and from
the salaries of top team management, but protects the Oregon taxpayer with a
series of legal safeguards. No general revenues are used nor is Oregon's bond
rating jeopardized by this type of financing.
An Overview of the
Bill
SB 5 provides that the State may enter into grant agreements
for 30 years to allow the new, incremental baseball tax revenues -- that will
come to the State if an MLB team relocates here -- to be used to support bonds
to assist with the cost of constructing a Major League Baseball Park. All of
the baseball business risk is placed on the grantee and team owner. If the
State income tax is reduced, the calculations of incremental baseball tax
revenues will continue to be based on the current income tax.
The
legislation will only become active when these thresholds have been
achieved:
1. A Major League Baseball team is committed to
relocate to Oregon;
2. The team is legally bound to remain in
Oregon for the length of the grant;
3. All of the remaining
financing for the Stadium has been committed;
4. The grant
agreement is requested by the city of Portland, and negotiated and approved by
the State; and
5. SAFEGUARDS are included to insure that the
State and her taxpayers are PROTECTED.
REQUIRED SAFEGUARDS IN THE
LEGISLATION AND GRANT AGREEMENT
1. All State funding is
subject to appropriation by the legislature;
2. The State has no
legal obligation to appropriate funds and the measure does not create any debt
for the State;
3. The State's credit rating is fully
protected;
4. SB 5 provides that the State intends to
appropriate only new incremental baseball tax revenues.
5. The
grantee, the team owner and the bondholders, NOT THE STATE, take the baseball
risk if the player payroll taxes fall below projected levels to pay any bonds,
and the grantee and the owner, NOT THE STATE, make up any
shortfall;
6. The granted funds may only be used to pay costs
for a major league stadium;
7. The methodology for the estimated
and actual incremental baseball tax revenues must be approved by the
State;
8. The grantee must pay the State the difference if any
appropriation exceeds the actual incremental baseball tax
revenues;
9. SB 5 requires all major league baseball teams that
play in Oregon to calculate, report and withhold these taxes and pay them to
the State on an annual basis; and
10. Not a single dollar will
be taken away from education, health or any other general fund program, and no
tax dollars from current Oregon taxpayers will be used. |
