BILL ANALYSIS Ó SENATE COMMITTEE ON AGRICULTURE Senator Cathleen Galgiani, Chair 2015 - 2016 Regular Bill No: AB 315 Hearing Date: 7/7/15 ----------------------------------------------------------------- |Author: |Bigelow | |-----------+-----------------------------------------------------| |Version: |3/19/15 | ----------------------------------------------------------------- ---------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ---------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Anne Megaro | | | | ----------------------------------------------------------------- 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 : ------------------------------------------------------------------ |Assembly Floor: |77 - 0 | |--------------------------------------+---------------------------| |Assembly Appropriations Committee: |17 - 0 | |--------------------------------------+---------------------------| |Assembly Agriculture Committee: |10 - 0 | | | | ------------------------------------------------------------------ SUPPORT : Rural County Representatives of California Western Fairs Association OPPOSITION : None received -- END --