Amended in Senate May 28, 2013

Amended in Senate April 24, 2013

Amended in Senate April 10, 2013

Senate Bill No. 741

Introduced by Senator Cannella

(Coauthors: Senators Berryhill, Fuller, Gaines, begin insert Galgiani, end insert and Nielsen)

(Coauthors: Assembly Members Achadjian, Alejo, Bigelow, Dahle, Gray, Olsen, Perea, V. Manuel Pérez, Salas, and Williams)

February 22, 2013

An act to amend Sections 19606.1, 19614, 19620, and 19620.2 of, and to repeal Sections 19608.3 and 19620.1 of, the Business and Professions Code, to amend Sections 3954, 3965, 3965.1, and 3967 of, to repeal Sections 4051.1, 4051.2, 4057, and 4401.5 of, and to repeal and add Sections 3200, 4051, and 4053 of, the Food and Agricultural Code, and to amend Section 11011.2 of the Government Code, relating to fairs, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 741, as amended, Cannella. California fairs: funding.

(1) Existing law regulates horse racing in this state and provides, among other things, for the payment and distribution of license fees in connection with horse racing meetings. Existing law establishes the Fair and Exposition Fund to, among other things, allocate moneys for the support of the network of California fairs. Existing law requires certain license fees from satellite wagering to be deposited into a separate account in the Fair and Exposition Fund, and continuously appropriates those moneys for specified purposes, including, among others, the payment of expenses incurred in establishing and operating satellite wagering facilities at fairs.

This bill would delete the provisions requiring satellite wagering license fees to be deposited into a separate account in the Fair and Exposition Fund and to be continuously appropriated for specified purposes. The bill would instead require certain revenues paid by racing associations and fairs generated by parimutuel wagering and certain revenues from live races paid by fair racing associations as license fees to be deposited into the Fair and Exposition Fund and would require those funds to be continuously appropriated for various purposes, including, among others, capital improvements at fairgrounds. The bill would also require all funds appropriated for California fairs and expositions to be deposited into the Fair and Exposition Fund and would continuously appropriate those funds for various purposes. By continuously appropriating the funds in the Fair and Exposition Fund, the bill would make an appropriation.

(2) Existing law provides that the Department of Food and Agriculture is responsible for providing oversight of activities carried out by each California fair, including, but not limited to, conducting fiscal and performance audits of county fairs and citrus fruit fairs that are either requested by the fair or that the department deems necessary, and conducting, or causing to be conducted, annual fiscal audits and periodic compliance audits.

This bill would delete the requirement that the department conduct the audits described above and would instead require the department to provide that the books and accounts for the prior calendar year of all fairs receiving money from the Fair and Exposition Fund be examined and reviewed annually and audited once every 3 years by an independent certified public accountant or certified public accountancy firm. The bill would require a summary of the examination to be appended to the fair’s annual statement of operation, and would provide that the costs of the annual review or audit be the responsibility of each fair.

(3) Existing law requires the Legislature, from the total revenue received from the Department of Food and Agriculture, to annually appropriate moneys to the department as it deems necessary for the oversight of the network of California fairs and to perform audits. Existing law continuously appropriates any of those funds that are unallocated to the Secretary of Food and Agriculture for specified purposes.

This bill would delete those provisions and instead would appropriate any unallocated balance in the Fair and Exposition Fund without regard to fiscal years for allocation by the secretary for capital outlay to California fairs for specified purposes. The bill would also specify that begin delete no more than 10% end delete begin insert a reasonable amount end insert of those funds begin insert , as determined by the secretary, end insert may be used during any year by the Division of Fairs and Expositions to provide oversight and administration of the network of fairs. The bill would require the secretary to annually project the available funds from the Fair and Exposition Fund and to prepare an annual expenditure plan for review and approval by the Joint Committee on Fairs, Allocation, and Classification. The bill would require the secretary’s recommendations to be deemed approved 30 days after they are received unless they are rejected by the committee.

(4) Existing law divides the state into agricultural districts and provides for the management of these districts by district agricultural associations. Existing law provides for a board of directors for each district agricultural association, and provides for the appointment of each director by the Governor.

This bill would authorize the Governor to remove a director for begin delete cause, upon recommendation by the board. The bill would require the board to adopt a policy and procedure outlining the vote threshold necessary to recommend the removal of a director. end delete begin insert cause within one year of the director’s appointment. end insert

(5) Existing law specifies the duties and responsibilities of district agricultural associations, and requires a district agricultural association to obtain the approval of the Department of Food and Agriculture prior to exercising certain powers, including, among others, the power to sue. Existing law also requires a district agricultural association to obtain the approval of both the Department of Food and Agriculture and the Department of General Services in order to exercise certain other powers, including the power to conduct activities upon the district agricultural association’s property, contract, purchase, or convey an interest in either real or personal property, or to use or manage its real estate or personal property.

This bill would revise the duties and responsibilities of the Department of Food and Agriculture and the Department of General Services with respect to district agricultural associations, and, among other things, would delete the requirement that a district agricultural association obtain the Department of Food and Agriculture’s approval prior to suing. The bill would also delete the requirement that a district agricultural association obtain prior approval from both the Department of Food and Agriculture and the Department of General Services prior to conducting activities upon the district agricultural association’s own property, or entering into a contract or exercising powers over its own real or personal property. begin delete The bill would require the board of directors of a district agricultural association to adopt policies and procedures for contracts, including adopting and publishing competitive bidding procedures for the award of any procurement or contract involving an expenditure of more than $100,000, and would require a district agricultural association to contract in accordance with those procedures. end delete The bill would begin delete also end delete require a district agricultural association to comply with specified contracting procedures begin insert , including, among others, soliciting bids in writing end insert if the estimated total cost of a project exceeds $25,000, as specified. The bill would require a district agricultural association to adopt a fiscal review policy to conduct audits at regular intervals, as specified, and would authorize the Department of Food and Agriculture to require an audit to be conducted at an earlier time if the department deems it necessary to protect the interests of the district agricultural association. The bill would specify that the title, control, and possession of all personal property acquired, held, managed, or operated by a district agricultural association vests with the district agricultural association. The bill would delete a provision requiring the Secretary of Food and Agriculture to expend up to $100,000 each fiscal year for an exhibit or exhibits at a fair that demonstrates the process of production and use of food and fiber, and would also delete a requirement that the secretary provide for a conference of fair judges to aid the Department of Food and Agriculture in prescribing regulations, and to expend up to $15,000 for that purpose. The bill would make other conforming and related changes.

(6) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 19606.1 of the Business and Professions
Code is amended to read:

19606.1.  

(a) All revenues transferred pursuant to Section
19616.52 and subdivision (d) of Section 19614 shall be deposited
in the Fair and Exposition Fund and, notwithstanding Section
13340 of the Government Code, are continuously appropriated
from the fund to the Department of Food and Agriculture, for
allocation by the Secretary of Food and Agriculture, at his or her
discretion, for the purposes set forth in paragraphs (1) to (6),
inclusive. The concurrence of the Director of Finance shall be
required for allocations pursuant to paragraphs (1) and (2).
Allocations pursuant to paragraphs (3) to (6), inclusive, shall be
made with the concurrence of the Joint Committee on Fairs,
Allocation, and Classification.

(1) For the repayment of the principal of, interest on, and costs
of issuance of, and as security, including any coverage factor,
pledged to the payment of, bonds issued or to be issued by a joint
powers agency or other debt service or expense, including
repayment of any advances made or security required by any
provider of credit enhancement or liquidity for those bonds or
other indebtedness or expenses of maintaining that credit
enhancement or liquidity, incurred for the purpose of constructing
or acquiring improvements at a fair’s racetrack inclosure, satellite
wagering facilities at fairs, health and safety repair projects, or
handicapped access compliance projects at fairs or for the purpose
of refunding bonds or other indebtedness incurred for those
purposes. As used in this paragraph, “coverage factor” means
revenues in excess of the amount necessary to pay debt service on
the bonds or other indebtedness, up to an amount equal to 100
percent more than the amount of that debt service, which a joint
powers agency, pursuant to the resolution or indenture under which
the bonds or other indebtedness are or will be issued, pledges as
additional security for the payment of that debt service or is
required to have or maintain as a condition to the issuance of
additional bonds or other indebtedness. Notwithstanding any other
law, the department may also commit any funds available for
allocation under Article 10 (commencing with Section 19620) to
complete projects funded under this paragraph in the priority
described in this paragraph.

(2) For payment to the State Race Track Leasing Commission
to be pledged for the repayment of debt necessary to construct a
racetrack grandstand at the 22nd District Agricultural Association
fairgrounds. This payment shall be made only if the secretary
determines, annually, that all other pledged revenues have been
applied to the repayment of that debt and have been determined
by the secretary to be inadequate for that purpose.

(3) For the general support of the network of California fairs
pursuant to the provisions of this chapter.

(4) For health and safety repair projects at fairs, including fire
and life safety improvement projects, regulatory compliance
projects, and long-term deferred maintenance projects.

(5) For capital improvements at fairgrounds. In making
determinations to fund capital improvements pursuant to this
paragraph, the secretary may grant priority status to renewable
energy generation projects.

(6) For the payment of expenses incurred in developing and
operating revenue generating projects at fairs, or which directly
benefit fairs, including the payment of expenses incurred in
establishing and operating horse racing facilities, industry training,
the establishment of pilot projects to restructure the current fair
system, and for projects realizing a cost savings for more efficient
utilization of existing fair resources.

(b) The secretary may not make an allocation for purposes of
paragraphs (2) to (6), inclusive, of subdivision (a) until the
payments required in any fiscal year pursuant to paragraph (1) of
subdivision (a) have been funded.

(c) Pursuant to subdivision (a), the Joint Committee on Fairs,
Allocation, and Classification shall review and concur, or not
concur, with the secretary’s determination of the allocations to be
made pursuant to paragraphs (3) to (6), inclusive, of subdivision
(a) in total, and the committee may not add to, or delete projects
or line items from, the proposed allocations.

(d) The secretary’s recommendations to the Joint Committee
on Fairs, Allocation, and Classification shall be deemed approved
30 days after they are received unless they are rejected by the
committee.

(e) If the Joint Committee on Fairs, Allocation, and
Classification does not concur with the secretary’s
recommendations, the secretary may submit another set of
recommendations to the committee pursuant to this section.

(f) The payments required in any fiscal year for the purposes
of paragraphs (1) and (2) of subdivision (a) shall be made before
the secretary may utilize any moneys pursuant to subdivision (g).

(g) Except as otherwise provided in subdivision (f), when the
revenues deposited in the Fair and Exposition Fund exceed the
amount necessary to satisfy the purposes of paragraphs (1) and (2)
of subdivision (a), the secretary may utilize the excess amounts
plus the amounts deposited to the credit of the Fair and Exposition
Fund pursuant to revenues deposited to the credit of the fund to
make allocations from the fund for the purposes of Section 19620.2.

SEC. 2.  

Section 19608.3 of the Business and Professions Code
is repealed.

SEC. 3.  

Section 19614 of the Business and Professions Code
is amended to read:

19614.  

(a) Notwithstanding Sections 19611 and 19612, and
except for an association that qualifies pursuant to Section 19612.6,
for a fair conducting a live racing meeting, 1 percent of the total
amount handled on live races, excluding wagering at a satellite
facility, shall be retained by the fair association for payment to the
state as a license fee.

(b) Additionally, 0.48 percent of the total amount handled on
live racing, excluding wagering at a satellite facility, shall be
deposited with the official registering agency pursuant to
subdivision (a) of Section 19617.2, and shall thereafter be
distributed in accordance with subdivisions (b), (c), and (d) of
Section 19617.2.

(c) (1) After distribution of the applicable amounts as set forth
in subdivisions (a) and (b) and the payments made pursuant to
other relevant sections of this chapter, all funds remaining from
the deductions provided in Section 19610 shall be distributed 47.5
percent as commissions and 52.5 percent as purses. From the
amount distributed as thoroughbred purses, a sum equal to 0.07
percent of the total handle shall be held by the association to be
deposited with the official registering agency pursuant to
subdivision (a) of Section 19617.2, and shall thereafter be
distributed in accordance with subdivisions (b), (c), and (d) of
Section 19617.2.

(2) Any additional amount generated for purses and not
distributed during the previous corresponding meeting shall be
added to the purses at the current meeting.

(d) In addition to the amounts deducted pursuant to Section
19610, any fair racing association shall deduct 1 percent from the
total amount handled in its daily conventional and exotic
parimutuel pools. The additional 1 percent shall be deposited in
the Fair and Exposition Fund and is hereby appropriated for the
purposes specified in paragraph (6) of subdivision (a) of Section
19606.1.

SEC. 4.  

Section 19620 of the Business and Professions Code
is amended to read:

19620.  

(a) The Legislature finds and declares that the
Department of Food and Agriculture is responsible for ensuring
the integrity of the Fair and Exposition Fund, administering
allocations from the fund to the network of California fairs, as
defined in Sections 19418 to 19418.3, inclusive, and providing
oversight of activities carried out by each California fair.

(b) Oversight shall include, but not be limited to, the following:

(1) Monitoring the solvency of the Fair and Exposition Fund.

(2) Distributing available state resources to the network of
California fairs based on criteria for state allocations approved by
the Secretary of Food and Agriculture. The criteria for the
distribution of available state resources to the network of California
fairs shall not include a consideration of the structure that governs
the fair.

(3) Creating a framework for administration of the network of
California fairs allowing for maximum autonomy and local
decisionmaking authority, and conducting, or causing to be
conducted, annual fiscal reviews.

(4) Requiring books and accounts for the prior calendar year of
all fairs receiving money from the fund to be examined and
reviewed annually and audited once every three years by an
independent certified public accountant or certified public
accountancy firm selected by the fair. A summary of this
examination, certified by the selected certified public accountant
or certified public accountancy firm, shall be appended to the fair’s
annual statement of operations, along with the accountant or
accounting firm’s recommendations, for the approval of the
secretary. The cost of a fair’s annual review or audit shall be the
responsibility of each fair. With the approval of the secretary, two
or more fairs may conduct or contract for a joint review or audit.

(5) Guiding and providing incentives to fairs to seek matching
funds and generate new revenue from a variety of sources.

(6) Supporting continuous improvement of fair programming
to ensure that California fairs remain highly relevant community
institutions.

SEC. 5.  

Section 19620.1 of the Business and Professions Code
is repealed.

SEC. 6.  

Section 19620.2 of the Business and Professions Code
is amended to read:

19620.2.  

(a) Any unallocated balance in the Fair and
Exposition Fund is hereby appropriated without regard to fiscal
years for allocation by the Secretary of Food and Agriculture for
capital outlay to California fairs for fair projects involving public
health and safety, for fair projects involving major and deferred
maintenance, for fair projects necessary due to any emergency,
for projects that are required by physical changes to the fair site,
for projects that are required to protect the fair property or
installation, such as fencing and flood protection, and for the
acquisition or improvement of any property or facility that will
serve to enhance the operation of the fair.

(b) A portion of the funds subject to allocation pursuant to
subdivision (a) may be allocated to California fairs for general
operational support. It is the intent of the Legislature that these
moneys be used primarily for those fairs whose sources of revenue
may be limited for purposes specified in this section.

(c)  begin delete Not more than 10 percent end delete begin insert As determined by the secretary,
a reasonable amount end insert of the funds specified in subdivision (a) may
be used during any year by the Division of Fairs and Expositions
to provide oversight and administration of the network of California
fairs pursuant to this chapter.

(d) The secretary shall annually project the available funds from
the Fair and Exposition Fund and shall advise the Joint Committee
on Fairs, Allocation, and Classification of the administrative budget
of the Division of Fairs and Expositions and the additional staff
and contracts necessary to develop and administer an operational
and policy framework to oversee the network of California fairs
and include that amount in the annual expenditure plan described
in subdivision (e).

(e) The secretary shall prepare an annual expenditure plan for
use of the moneys available from the Fair and Exposition Fund
for review and approval by the Joint Committee on Fairs,
Allocation, and Classification. The Joint Committee on begin delete Fairs end delete begin insert Fairs, end insert
Allocation begin insert , end insert and Classification shall review and concur, or not
concur, with the spending plan in total, and shall not add to, or
delete projects or line items from, the proposed allocation.

(f) The secretary’s recommendations to the Joint Committee on
Fairs, Allocation, and Classification shall be deemed approved 30
days after they are received unless they are rejected by the
committee.

(g) If the Joint Committee on Fairs, Allocation, and
Classification does not concur with the secretary’s
recommendations, the secretary may submit another set of
recommendations to the committee.

SEC. 7.  

Section 3200 of the Food and Agricultural Code is
repealed.

SEC. 8.  

Section 3200 is added to the Food and Agricultural
Code, to read:

3200.  

(a) The Legislature finds and declares that funding for
the network of California fairs is a cooperative venture and is
anticipated to be generated from multiple sources, public and
private. Because of the benefits that accrue to the state and to its
residents by virtue of having the fair industry participate
cooperatively with the state for the purpose of effectively
overseeing and promoting fairs within the state, the Legislature
finds and declares that the fairs shall work collectively to identify
and designate new funding sources for fairs to be utilized for the
benefit of all fairs in the network.

(b) Notwithstanding any other law, all funds appropriated for
California fairs and expositions pursuant to this chapter or any
other law shall be deposited in the Fair and Exposition Fund and
are continuously appropriated as specified in Sections 19606.1
and 19620.2 of the Business and Professions Code.

(c) Notwithstanding Article 2 (commencing with Section 11270)
of Chapter 3 of Part 1 of Division 3 of Title 2 of the Government
Code relating to administrative costs, the California Exposition
and State Fair and the fairs specified in Sections 19418.1, 19418.2,
and 19418.3 of the Business and Professions Code shall only be
assessed and pay a share of those costs directly related to personnel
administration and no other administrative costs for services from
other state agencies except costs for services rendered pursuant to
specific contracts entered into with other state agencies.

SEC. 9.  

Section 3954 of the Food and Agricultural Code is
amended to read:

3954.  

Each association by its name has perpetual succession.
It may have a seal. An association may be sued and may sue, and
may do any and all things necessary to carry out the powers and
the objects and purposes for which the association is formed.

SEC. 10.  

Section 3965 of the Food and Agricultural Code is
amended to read:

3965.  

The board may, with the approval of the department:

(a) Fix the term of office, the amount of bond, salary, and
prescribe the duties of the secretary and of the treasurer.

(b) Manage the affairs of the association.

(c) Make all necessary bylaws, rules, and regulations for the
government of the association.

(d) Delegate, as it may deem advisable, to its officers or
employees any of the powers that are vested in the board under
subdivision (b). Any delegation of power may be revoked at any
time.

SEC. 11.  

Section 3965.1 of the Food and Agricultural Code is
amended to read:

3965.1.  

(a) Notwithstanding Section 3965 or 4051, the board
may arrange for and conduct, or cause to be conducted, or by
contract permit to be conducted, by any other individual, institution,
corporation, or association, upon its property at a time as it may
be deemed advisable, any activity.

(b) Notwithstanding subdivision (a), revenue generating
contracts involving hazardous activities shall not be approved by
the board unless adequate insurance coverage is provided, as
determined by the department in consultation with the Department
of General Services.

SEC. 12.  

Section 3967 of the Food and Agricultural Code is
amended to read:

3967.  

(a) Any director who misses three consecutive regular
meetings of the board without the permission of the board is
deemed to have resigned from the board.

begin delete

(b) (1) A director may be removed for cause by the Governor,
upon recommendation by the board.

end delete begin delete

(2) The board shall adopt a policy and procedure outlining the
vote threshold necessary to remove a director pursuant paragraph
(1).

end delete begin insert

(b) The Governor may remove a director for cause within one
year of the director’s appointment.

end insert

SEC. 13.  

Section 4051 of the Food and Agricultural Code is
repealed.

SEC. 14.  

Section 4051 is added to the Food and Agricultural
Code, to read:

4051.  

(a) Subject only to the conditions specified in this
chapter, an association may do any of the following:

(1) Contract in accordance with all of the following:

begin delete

(A) The association shall develop, maintain, and comply with
its own written policies and procedures for contracting.

(B) Notwithstanding any other law, in developing the policies
and procedures referenced in subparagraph (A), the board shall
incorporate the following to apply to contracts entered into or
procurement by a district agricultural association:

(i) To ensure the fullest competition, the board shall adopt and
publish competitive bidding procedures for the award of any
procurement or contract involving an expenditure of more than
one hundred thousand dollars ($100,000). The competitive bidding
procedures shall include, but not be limited to, requirements for
submission of bids and accompanying documentation, guidelines
for the use of requests for proposals, invitations to bid, or other
methods of bidding, and a bid protest procedure. The general
manager on behalf of the district agricultural association shall
determine whether the goods subject to this paragraph are available
through existing contracts or price schedules of the Department
of General Services. The Legislature finds and declares that fairs
are a valuable community resource and recognizes that local
businesses and local communities make valuable contributions to
fairs that include direct and indirect support of fair programs. The
Legislature further finds and declares that local businesses often
provide opportunity purchases to local fairs that, for similar things
available through the state purchasing program, may be purchased
locally at a price equivalent to or less than that available through
the state purchasing program. As used in this paragraph,
“opportunity purchases” means purchases made locally, either
individually or cooperatively, at a price equal to or less than the
price available through the state purchasing program on or off state
contract.

(ii) The contracting standards, procedures, and rules contained
in this subdivision shall also apply to any subcontract involving
an expenditure of more than one hundred thousand dollars
($100,000). The board shall establish, as part of the bidding
procedures for general contracts, subcontracting guidelines that
implement this requirement.

(iii) The board is subject to the Small Business Procurement
and Contract Act (Chapter 6.5 (commencing with Section 14835)
of Part 5.5 of Division 3 of Title 2 of the Government Code).

(iv) Notwithstanding clauses (i) and (ii), if

end delete begin insert

(A) All applicable state laws governing contracts, except as
follows:

end insert begin insert

(i) A contract entered into by an association for goods is not
subject to Chapter 2 (commencing with Section 10290) of Part 2
of Division 2 of the Public Contract Code.

end insert begin insert

(ii) Any contract entered into by an association is not subject
to Chapter 3 (commencing with Section 12100) of Part 2 of
Division 2 of the Public Contract Code.

end insert

begin insert (B) end insert begin insert   end insert begin insert If end insert the estimated total cost of any construction project or
similar work carried out under this section exceeds twenty-five
thousand dollars ($25,000), the district agricultural association
shall solicit bids in writing and shall award the work to the lowest
responsible bidder or reject all bids. The district agricultural
association is subject to all applicable provisions of the Public
Contract Code.

begin delete

(v)

end delete

begin insert (C) end insert  A district agricultural association may elect to become
subject to the provisions of the Uniform Public Construction Cost
Accounting Act (Chapter 2 (commencing with Section 22000) of
Part 3 of Division 2 of the Public Contract Code).

(2) Accept funds or gifts of value from the United States or any
person to aid in carrying out the purposes of this part.

(3) Conduct or contract for programs, and contract for the
purchase or lease of goods as are necessary for effectuating the
purposes of this chapter, either independently or in cooperation
with any individual, public or private organization, or federal,
state, or local governmental agency.

(4) Establish and maintain a bank checking account or other
financial institution account, approved by the Director of Finance
in accordance with Sections 16506 and 16605 of the Government
Code, for depositing funds received by the district agricultural
association. Notwithstanding Section 13340 of the Government
Code, all funds maintained in an account authorized by this
paragraph are continuously appropriated to the board, without
regard to fiscal year, to carry out this part.

(5) Approve the annual budget of the association and establish
a program for paying vendors who contract with the district
agricultural association.

(6) Contract with any county or county fair association for
holding a fair jointly with the county or county fair association.
The joint fair is a district fair of the association.

(7) Make or adopt all necessary orders, rules, or regulations for
governing the activities of the district agricultural association.
Notwithstanding Section 14, any orders, rules, or regulations
adopted by the board are exempt from Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code. For informational purposes only, however, any
order, rule, or regulation adopted by the board may be transmitted
to the Office of Administrative Law for filing with the Secretary
of State pursuant to Section 11343 of the Government Code.

(8) Operate a payroll system for paying employees, and a system
for accounting for vacation and sick leave credits of employees.

(9) Delegate to the officers and employees of the district
agricultural association the exercise of powers vested in the board
as the board may deem desirable for the orderly management and
operation of the association.

(10)  begin delete Except as provided in paragraph (12), with end delete begin insert With end insert the
approval of the Department of General Services, purchase, acquire,
hold, sell, or exchange, or convey any interest in real property for
a period in excess of 20 years. Any acquisition of land or other
real property shall be subject to the Property Acquisition Law (Part
11 (commencing with Section 15850) of Division 3 of Title 2 of
the Government Code).

(11) Make permanent improvements upon publicly owned real
property adjacent to, or near the vicinity of, the real property of
the district agricultural association when the improvements
materially benefit the property of the association.

begin delete

(12) Lease, let, or grant licenses for the use of its real property
or any portion of that property, to any person or public body for
whatever purpose as may be approved by the board. Any lease of
real property for a period in excess of 20 years shall be subject to
the approval of the Department of General Services as provided
in paragraph (10).

(13)

end delete

begin insert (12) end insert  Use or manage any of its property jointly or in connection
with any lessee or sublessee, for any purpose approved by the
board.

begin delete

(14)

end delete

begin insert (13) end insert  With the approval of the Department of General Services,
pledge any and all revenues, moneys, accounts, accounts
receivable, contract rights, and other rights to payment of whatever
kind, pursuant to such terms and conditions as are approved by
the board. The revenues, moneys, accounts, accounts receivable,
contract rights, and other rights to payment of whatever kind
pledged by the association or its assignees constitute a lien or
security interest that immediately attaches to the property pledged,
and is effective, binding, and enforceable against the association,
its successors, purchasers of the property so pledged, creditors,
and all others asserting rights therein, to the extent set forth, and
in accordance with, the terms and conditions of the pledge,
irrespective of whether those persons have notice of the pledge
and without the need for any physical delivery, recordation, filing,
or further action.

(b) (1) Notwithstanding any other law, an association shall
adopt a fiscal review policy as follows:

(A) An association with an annual budget exceeding five million
dollars ($5,000,000) shall conduct an annual audit by an
independent certified public accountant or certified public
accountancy firm selected by the board.

(B) An association with an annual budget of less than five
million dollars ($5,000,000) shall have its books and accounts
examined and reviewed annually and audited once every three
years by an independent certified public accountant or certified
public accountancy firm selected by the board.

(2) Notwithstanding paragraph (1), the department may require
an audit to be conducted before the times specified in
subparagraphs (A) and (B) of paragraph (1) if the department
deems the audit is necessary to protect the interests of the
association.

SEC. 15.  

Section 4051.1 of the Food and Agricultural Code is
repealed.

SEC. 16.  

Section 4051.2 of the Food and Agricultural Code is
repealed.

SEC. 17.  

Section 4053 of the Food and Agricultural Code is
repealed.

SEC. 18.  

Section 4053 is added to the Food and Agricultural
Code, to read:

4053.  

Notwithstanding Section 14660.5 of the Government
Code, the title, control, and possession of all personal property
acquired, held, managed, or operated by a district agricultural
association, including property controlled or possessed by the
association before the enactment of this section, vests with the
association.

SEC. 19.  

Section 4057 of the Food and Agricultural Code is
repealed.

SEC. 20.  

Section 4401.5 of the Food and Agricultural Code is
repealed.

SEC. 21.  

Section 11011.2 of the Government Code is amended
to read:

11011.2.  

(a) (1) Notwithstanding any other law, including,
but not limited to, Sections 11011 and 14670, except as provided
in this section, the Department of General Services may lease real
property under the jurisdiction of a state agency or department, if
the Director of General Services determines that the real property
is of no immediate need to the state but may have some potential
future use to the program needs of the agency or department.

(2) The Director of General Services may not lease any of the
following real property pursuant to this section:

(A) Tax-deeded land or lands under the jurisdiction of the State
Lands Commission.

(B) Land that has escheated to the state or that has been
distributed to the state by court decree in estates of deceased
persons.

(C) Lands under the jurisdiction of the State Coastal
Conservancy or another state conservancy.

(D) Lands under the jurisdiction of the Department of
Transportation or the California State University system, or land
owned by the Regents of the University of California.

(E) Lands under the jurisdiction of the Department of Parks and
Recreation.

(F) Lands under the jurisdiction of the Department of Fish and
Wildlife.

(3) A lease entered into pursuant to this section shall be set at
the amount of the lease’s fair market value, as determined by the
Director of General Services. The Director of General Services
may determine the length of term or a use of the lease, and specify
any other terms and conditions that are determined to be in the
best interest of the state.

(b) The Department of General Services may enter into a
long-term lease of real property pursuant to this section that has
outstanding lease revenue bonds and for which the real property
cannot be disencumbered from the bonds, only if the issuer and
trustee for the bonds approves the lease transaction, and this
approval takes into consideration, among other things, that the
proposed lease transaction does not breach a covenant or obligation
of the issuer or trustee.

(c) (1) All issuer- and trustee-related costs for reviewing a
proposed lease transaction pursuant to this section, and all other
costs of the lease transaction related to the defeasance or other
retirement of any bonds, including the cost of nationally recognized
bond counsel, shall be paid from the proceeds of that lease.

(2) The Department of General Services shall be reimbursed
for any reasonable costs or expenses incurred in conducting a
transaction pursuant to this section.

(3) Notwithstanding subdivision (g) of Section 11011, the
Department of General Services shall deposit into the General
Fund the net proceeds of a lease entered into pursuant to this
section, after deducting the amount of the reimbursement of costs
incurred pursuant to this section or the reimbursement of
adjustments to the General Fund loan made pursuant to Section 8
of Chapter 20 of the 2009-10 Fourth Extraordinary Session from
the lease.

(d) The Department of General Services shall transmit a report
to each house of the Legislature on or before June 30, 2011, and
on or before June 30 each year thereafter, listing every new lease
that exceeds a period of five years entered into under the authority
of this section and the following information regarding each listed
lease:

(1) Lease payments.

(2) Length of the lease.

(3) Identification of the leasing parties.

(4) Identification of the leased property.

(5) Any other information the Director of General Services
determines should be included in the report to adequately describe
the material provisions of the lease.

SEC. 22.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to restore the viability of California fairs as soon as
possible, it is necessary that this act take effect immediately.