BILL ANALYSIS SENATE FOOD and AGRICULTURE COMMITTEE Senator Dean Florez, Chairman BILL NO: SB 1085 HEARING: 4/20/10 AUTHOR: Runner FISCAL: Yes VERSION: 2/17/10 CONSULTANT: John Chandler 50th District Agricultural Association: Antelope Valley Fair: lease. BACKGROUND AND EXISTING LAW California Department of Food and Agriculture (CDFA), Division of Fairs and Expositions (DFE) is responsible for overseeing the 54 District Agriculture Associations (DAA) throughout the state that make up the California network of fairs. Each DAA operates with a degree of autonomy, with a board of directors appointed by the governor, and in accordance with state law governing the operation of state agencies. DAAs contribute a great deal to the state of California. They offer an opportunity for the local community to highlight its achievements, and in many cases, they recognize the agriculture of the local area. The Antelope Valley Fair Association was incorporated on September 12, 1938, and operated locally for three years. On September 13, 1941, the Antelope Valley Fair became the 50th DAA with the donation of the land to the state. The 50th DAA is located in the northern part of Los Angeles County in the City of Lancaster. Working with the City of Lancaster, the 50th DAA was relocated to a new site in 2003. In the current fiscal year, the 50th DAA generated $4.7 million in revenue and only received approximately $25,000 from the Fairs and Exposition Fund. The Governor's 2004 California Performance Review proposed to help refocus government on essential functions and redirect functions to cooperative public-private ventures. As part of this review, it was suggested that the 54 DAAs be transformed into public benefit corporations. SB 1436 (Thompson), Chapter 259, Statutes of 1998, allows the Director of General Services (DGS), with the consent of the Secretary of State and Consumer Services, to lease the Napa Valley Expo in Napa County for up to 99 years to a nonprofit organization to operate an annual fair in lieu of the fair held by the 25th District Agricultural Association. SB 281 (Maldonado), Chapter 346, Statutes of 2007, requires CDFA SB 1085 - Page 2 to develop, upon approval of DGS, criteria to be used for the purchase of goods and the disposal of property by a district agricultural association and Cal Expo. In 2006, SB 1041 (Denham) would have transferred, from the Department of General Services (DGS) to CDFA, the responsibility to annually prepare a program for DAAs for delegating purchasing authority to the DAAs. This bill was held in the Assembly Appropriations Committee. PROPOSED LAW SB 1085 would authorize, with the approval of CDFA, a nonprofit organization to hold an annual fair in lieu of an annual fair held by the 50th DAA. Specifically, this bill would: Authorize the nonprofit to receive state funds. Authorize Department of General Services to lease the property of the 50th DAA, with the consent of CDFA, for up to 99 years to a nonprofit to hold an annual fair. Specify that the 50th DAA would be inactive while the lease is in effect. Allow the lease to be for less than market value of the property. Specify that if the nonprofit fails to hold an annual fair the lease may be cancelled. Provide that every civil service member of the 50th DAA have an option to remain in state employment under contract to the leasing nonprofit or accept a position as an employee of the leasing nonprofit organization. Specify that the state is not liable for any debts, liabilities, settlements, liens, or other obligations incurred or imposed upon the nonprofit organization. COMMENTS 1.Supporters of SB 1085 state that the lease of the 50th DAA to a nonprofit for operation of the annual fair would allow greater efficiency by removing the constraints created by the SB 1085 - Page 3 state bureaucracy. Further, this bill would allow the operation of the fair to be closely aligned with local government, helping the fair to better reflect the local area. With greater efficiency and closer links to local government, SB 1085 would help the Antelope Valley Fair operate more successfully. 2.The Business and Professions Code specifies that the 50th DAA is included in the "network of California fairs." SB 1085 allows the 50th DAA to be leased to a nonprofit for the operation of an annual fair. During this lease, the 50th DAA would revert to inactive status. This change could potentially remove the Antelope Valley Fair from the "network of California fairs." The committee may wish to consider if the bill should include a provision allowing the Antelope Valley Fair to be part of the network of California fairs if it is leased by a nonprofit to operate an annual fair. SUPPORT 50th District Agricultural Association Antelope Valley Chamber of Commerce California Horse Council Dawn Babers Don Jesser H.W. Hunter, Inc. Johnny Zamrzla Michael Antonovich, Los Angeles County Supervisor Rex Parris, Mayor, City of Lancaster Stone Roofing Company The Showdown Western Fairs Association Western Pacific Roofing Corporation OPPOSITION None received