BILL ANALYSIS Ó
AB 1069
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1069 (Dickinson) - As Amended: March 20, 2013
Policy Committee: AgricultureVote:8
- 0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill shifts the management and governance of the California
Exposition and State Fair (Cal Expo) to a separate, independent
entity within state government. Specifically, this bill:
1)Declares the intent of the Legislature that Cal Expo
reorganize as a separate, independent entity.
2)Requires the Board of Directors for Cal Expo to establish a
policy to ensure fiscal independence.
3)Shifts all proceeds from the annual California State Fair,
leasing of the fairgrounds, or the sale of Cal Expo property,
from the state to Cal Expo.
4)Requires the general manager of Cal Expo to report annually by
May 31 to the governor on all events, operations, and the
financial condition of Cal Expo.
FISCAL EFFECT
1)Because this legislation shifts all proceeds from the sale or
leasing of Cal Expo property from the state to Cal Expo, this
represents a loss of potential GF revenue, should the state
ever decide to declare Cal Expo surplus property and sell all
or a portion of the land. During the 2009-2010 Kings Arena
negotiations, the value of the 350 acre Cal Expo site was
estimated to be $200 million.
2)To the extent the Cal Expo property was purchased with GF,
this bill could be in conflict with Proposition 60A, which was
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approved by the voters in November 2004 and requires that the
proceeds of state surplus property sales be used first to
retire the state's Economic Recovery Bonds and thereafter be
deposited in the GF.
3)This bill continuously appropriates money credited to Cal
Expo. The proposed continuous appropriation of funds is
contrary to general committee policy.
COMMENTS
1)Purpose . This bill defines Cal Expo as an independent entity
in state government. According to the author, this serves as
the first stage of giving Cal Expo the flexibility to operate
the state fairgrounds as a business enterprise. The greater
independence sought by this bill includes ensuring that all
proceeds from the sale, leasing, or other agreement entered
into by the Cal Expo board concerning Cal Expo shall be
retained by Cal Expo and shall be available for Cal Expo to
use outside of the state budget process. Supporters state that
these changes are needed to aid Cal Expo in gaining new
revenue streams and streamlining business operations.
Currently, Cal Expo has a backlog of deferred maintenance in
excess of $45 million and supporters think this bill is an
important step in securing funding to help Cal Expo upgrade
its facilities. Supporters state this bill is the first step
in helping Cal Expo preserve and create jobs, improve its
property and grow its business.
2)Background . The current 375-acre site of the California
Exposition and State Fair opened in 1968 as a modern state of
the art entertainment center and home to California's annual
state fair. Cal Expo is visited annually by more than 1.5
million people and it is estimated these visitors generate
$250 million in economic activity. Cal Expo is an aging
facility, however, with a deteriorating infrastructure, which
now accounts for more than $45 million in deferred
maintenance, as noted above.
3)State Fair Leasing Authority (SFLA) . Given the deteriorating
nature of Cal Expo, in 2007 the Legislature passed a bill
establishing the SFLA. The intent of that legislation was to
create autonomy for Cal Expo by allowing them to enter into
leases and other agreements for the use of any property owned
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or operated by Cal Expo and to issue bonds and other forms of
debt to carry out the SFLA's purposes. That legislation did
not, however, give them the authority to sell or dispose of
the property. The structure of the SFLA and their authority is
modeled after the State Race Track Leasing Commission (SRTLC)
that exercises similar duties as it pertains to the Del Mar
fairgrounds and race track. The SRTLC has been overseeing the
Del Mar race track since 1968.
The SFLA board of governors is comprised of the Director of
Finance (DOF) (Chair), the Director of General Services (DGS),
the Secretary of Food and Agriculture (CDFA), and four members
of the Cal Expo Board of Directors. The State Treasurer and
the State Controller are also seated on the board in the event
the SFLA decides to issue bonds or enter into other forms of
indebtedness.
4)Related Legislation . AB 1204 (Dickinson), 2012, a similar
bill, was held on this committee's suspense file.
SB 282 (Cox; Chapter 293, Statutes of 2007) established the
SFLA, for the purpose of entering into leases or other
agreements for the use of the Cal Expo race track, or any
other property owned or controlled by Cal Expo, and to create
a long term infrastructure master plan for the development and
improvement of Cal Expo.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081