California Governor Arnold Schwarzenegger on Tuesday signed legislation supporting Los Angeles' bid for hosting the 2016 Summer Olympic Games.

This bill authorizes the state to enter into an agreement to be jointly liable for cost overruns of up to 250 million dollars with the Southern California Committee for the Olympic Games (SCCOG) for the 2016 Summer Olympic Games if Los Angeles became the host city, the governor said in a statement e-mailed to Xinhua.

This bill allows the City of Los Angeles to meet the USOC (United States Olympic Committee) requirement that a bid city obtains a state guarantee for cost overruns and liability from hosting the Olympics.

With this requirement met, Los Angeles can compete directly against Chicago for the 2016 Summer Olympic Games U.S. bid.

"The Golden State is an ideal setting for an event that epitomizes the glory of sport and physical achievement and I can think of no better home for the 2016 Olympic Games than Los Angeles," said Schwarzenegger.

"It is no coincidence that California is home to more Olympians than any other state. We have long been a global center for the health and fitness movement, and the Games hold a special place in the hearts of all Californians."

Earlier this year, the governor announced his endorsement of Los Angeles' bid for the 2016 Summer Olympics Games.

Los Angles is competing against Chicago to be selected as the United States Applicant City for the 2016 Games by the USOC, which will announce its selection this Saturday.

The International Olympics Committee will meet in Copenhagen in October 2009 to choose the 2016 host city.

Los Angeles is a strong contender, with a wealth of existing facilities that will serve as Olympic venues, most of which are new since the 1984 Los Angeles Games. The Los Angeles Coliseum hosted the opening and closing ceremonies of both the 1932 and 1984 Games.

"Los Angeles has all the facilities the Olympics need. It also has incredible tradition and a gold medal record when it comes to hosting these great summer games," the governor said. "Los Angeles embodies the Olympic spirit. It is a city built on dreams, where anything is possible."

California sent more athletes to the 2004 Summer and 2006 Winter Games than any other state. At Athens in 2004, there were 143 Californians -- 1 in every 4 athletes on the U.S. team.