BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON AGRICULTURE
                          Senator Cathleen Galgiani, Chair
                                2015 - 2016  Regular 

          Bill No:           AB 315          Hearing Date: 7/7/15
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          |Author:    |Bigelow                                              |
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          |Version:   |3/19/15                                              |
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          |Urgency:   |No                    |Fiscal:    |Yes              |
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          |Consultant:|Anne Megaro                                          |
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                  Subject:  Fairs: annual reports and expenditures

           SUMMARY  :
          This bill would repeal the requirement that fairs provide an  
          annual report of the number of credential and courtesy pass  
          admissions issued; repeal the requirement that the California  
          Department of Food and Agriculture spend $100,000 for specified  
          exhibits and $15,000 for a conference of fair exhibit judges.

           BACKGROUND AND EXISTING  
          LAW  :
          California fairs have been in existence since 1854, and the  
          network has since grown to encompass 78 fairs statewide.  This  
          network of California fairs is composed of 52 district  
          agricultural associations (DAA), 23 county fairs, 2 citrus fruit  
          fairs, and The California Exposition and State Fair (Cal Expo).   
          DAAs are state government entities governed by nine-member  
          gubernatorial appointed boards of directors (fair boards).  In  
          contrast, county fairs are county government or not-for-profit  
          organizations; citrus fruit fairs are not-for-profit  
          organizations; and Cal Expo is a state agency.

          In 2009, California fairs generated a $2.85 billion economic  
          impact from consumer sales, $855 million in income for  
          California employees, $127 million in annual state and local tax  
          revenues, and provided 25,000 jobs.  Fairs serve the local  
          community by providing a venue for a variety of agricultural and  
          local community events such as livestock shows and competitions,  
          county fairs, trade shows, exhibits, and food, nutrition, and  
          agricultural education.  Fairgrounds also serve the state by  
          assisting in emergency preparedness and response.  In the event  







          AB 315 (Bigelow)                                   Page 2 of ?
          
          
          of natural disasters, fairgrounds may be transformed into  
          command centers for CalFire, CalEMA, Homeland Security, law  
          enforcement, and FEMA.  They also provide shelter for displaced  
          persons and their pets and livestock.

          The Division of Fairs and Expositions within the California  
          Department of Food and Agriculture (CDFA) provides fiscal and  
          policy oversight for the network of California fairs; and the  
          Department of General Services (DGS) provides oversight for use  
          of state property, procurement, and services contracts (Business  
          and Professions Code §19400 et seq.; Food and Agricultural Code  
          §3001 et seq.).

          Existing law:

             1)   Requires that each fair which receives state funds  
               provide an annual report to the secretary of the California  
               Department of Food and Agriculture (CDFA) of the number of  
               credential and courtesy pass admissions issued and honored  
               at the fair.

             2)   Requires the secretary of CDFA to spend up to $100,000  
               per fiscal year for any exhibits located at a  
               state-supported fair that demonstrates how food and fiber  
               is produced and used in the state.

             3)   Requires the secretary of CDFA spend a maximum $15,000  
               annually for a conference of fair judges to assist in  
               prescribing regulations for the judging of exhibits and for  
               determining the maximum amount of premiums to be offered  
               and paid for all types of exhibits.

           PROPOSED  
          LAW  :

          This bill:

             1)   Repeals the requirement that fairs provide an annual  
               report to CDFA of the number of credential and courtesy  
               pass admissions issued and honored at the fair.

             2)   Repeals the requirement that the secretary of CDFA spend  
               a maximum $100,000 per fiscal year for any exhibits located  
               at a state-supported fair that demonstrates how food and  
               fiber is produced and used in the state.








          AB 315 (Bigelow)                                   Page 3 of ?
          
          

             3)   Repeals the requirement that the secretary of CDFA spend  
               a maximum $15,000 annually for a conference of fair exhibit  
               judges.

           ARGUMENTS IN SUPPORT:
           
          According to the author, "The Governor has slashed the Fair and  
          Exposition Fund completely, drying up our rural fairs' funding  
          foundation for the foreseeable future.  It is imperative the  
          legislature and Governor act to alleviate any cost pressures  
          county fairs are facing."  Specifically, this bill would remove  
          the annual credential and courtesy passes reporting requirement,  
          the requirement that CDFA fund exhibits highlighting food  
          production, and the requirement that CDFA provide for an annual  
          conference for fair judges.

           COMMENTS  :

          Financial state of fairs. The source of state funding for DAAs  
          has historically been dependent on horse racing license fees,  
          which in recent years have significantly declined.  In 2009, the  
          legislature recognized the need for a new source of funding for  
          the continuation of fairs and, thus, continuously appropriated  
          $32 million from the state's General Fund to be paid into the  
          Fairs and Exposition Fund (F&E Fund) [SB 16 X2 (Ashburn)].  

          However, the 2011-12 state budget eliminated General Fund  
          contributions to the F&E Fund, requiring DAAs to be  
          self-sufficient as of January 1, 2012.  Since that time, several  
          bills have been introduced and proposals have been discussed  
          that aim to reduce DAA operating and administrative costs.   
          Given that DAAs are state entities, these proposals have  
          generally focused on reducing state oversight and specified  
          requirements while increasing local decision-making and  
          flexibility.  

          Informational hearing.  The Senate Committee on Agriculture held  
          an informational hearing in 2012 titled "The Future of Fairs in  
          California" to examine the financial status of fairs and discuss  
          alternative funding solutions to ensure the vitality of  
          California fairs.  Testimony from fair industry representatives  
          acknowledged that many smaller fairs were at risk of closing if  
          alternative funding strategies and/or governance structures were  
          not utilized. 








          AB 315 (Bigelow)                                   Page 4 of ?
          
          

          2015/16 Budget. The budget appropriates $3.1 million from the  
          General Fund to CDFA to assist fair operations, training, and to  
          improve the financial stability of fairs statewide.  The budget  
          also appropriates $7 million to fairs for deferred maintenance  
          as part of the governor's 2015 Five-Year Infrastructure Plan.

          Author's amendments. 
             1)   Strike Section 1 (page 2, lines 1 through 5, inclusive)  
               relating to annual reporting of credential and courtesy  
               passes issued.

           RELATED  
          LEGISLATION  :

          AB 1647 (Bigelow) of 2014.  Would have repealed the requirement  
          that specified fairs report the number of credential and  
          courtesy passes issued, and would repeal requirements that the  
          California Department of Food and Agriculture expend funds  
          relating to exhibits.  This bill was substantially amended and  
          removed agricultural provisions.

          AB 2490 (Eggman), Chapter 342, Statutes of 2014.  Revises the  
          oversight responsibilities of CDFA and DGS in regards to  
          district agricultural associations, and makes conforming  
          changes.

          SB 741 (Cannella) of 2013. Would revise the duties,  
          responsibilities, and powers of the California Department of  
          Food and Agriculture, the Department of General Services, and  
          district agricultural associations in regards to the operation,  
          oversight, administration, governance, and funding of the  
          network of California fairs. Held in the Assembly Committee on  
          Appropriations.  

          AB 2345 (Ma) of 2012.  Would have established the California  
          Fair Network Commission as a nonprofit, mutual-benefit  
          corporation to assess fees for services, manage funds, and  
          provide administration and oversight of California's fairs. Held  
          in Assembly Committee on Appropriations.  

          AB 95 (Budget), Chapter 2, Statutes of 2011.  Repeals the $32  
          million annual General Fund appropriation for the support of the  
          network of California fairs.









          AB 315 (Bigelow)                                   Page 5 of ?
          
          
          SBX2 16 (Ashburn), Chapter 12, Statutes of 2009-10 Second  
          Extraordinary Session. Provides that horse racing license fees  
          no longer be paid into the Fairs & Expositions Fund, and instead  
          provides that beginning July 1, 2009, $32 million shall be  
          continuously appropriated from the state General Fund to the  
          Fairs and Exposition Fund for the support of the network of  
          California fairs.

           PRIOR  
          ACTIONS  :
                         
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          |Assembly Floor:                       |77 - 0                     |
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          |Assembly Appropriations Committee:    |17 - 0                     |
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          |Assembly Agriculture Committee:       |10 - 0                     |
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           SUPPORT  :
          
          Rural County Representatives of California
          Western Fairs Association

           OPPOSITION  :
          
          None received

                                      -- END --