BILL NUMBER: AB 1256 CHAPTERED 06/30/00 CHAPTER 53 FILED WITH SECRETARY OF STATE JUNE 30, 2000 APPROVED BY GOVERNOR JUNE 30, 2000 PASSED THE ASSEMBLY JUNE 26, 2000 PASSED THE SENATE JUNE 22, 2000 AMENDED IN SENATE MAY 17, 2000 AMENDED IN SENATE JUNE 24, 1999 INTRODUCED BY Committee on Agriculture (Cardoza (Chair), Maldonado (Vice Chair), Brewer, Florez, Reyes, Thomson, and Wiggins) FEBRUARY 26, 1999 An act to amend Sections 19606.1 and 19620.1 of the Business and Professions Code, relating to fairs, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1256, Committee on Agriculture. Fairs: funding. (1) Existing law authorizes parimutuel wagering on the outcome of horse races, and provides that the first $1,100,000 of all revenue distributed to racing associations for payment to the state as license fees shall be deposited into a special account of the Fairs and Exposition Fund and is thereafter continuously appropriated to the Department of Food and Agriculture for supplementing purses at fair meetings. (2) Existing law also provides that except for the revenues described in (1), all revenues distributed to the state as license fees from satellite wagering shall be deposited into a separate account in the fund and are continuously appropriated to the department for allocation by the Secretary of Food and Agriculture for specified purposes related to capital improvements and operational costs of fairs and satellite wagering facilities. Existing law also provides that when revenues deposited into this account exceed $11,000,000 in any fiscal year, 98% of the amount in excess shall be transferred to the General Fund, but that repayments of specified securities issued for the purpose of constructing or acquiring improvements to fair racing inclosures, satellite facilities, and access compliance projects, repayment of debts incurred by the State Race Track Leasing Commission for the construction of a grandstand at the Del Mar fairgrounds, and the payment of expenses incurred in establishing and operating satellite wagering facilities generally, shall be made before any funds are thereby transferred. (3) Existing law also provides that from the total revenue received by the California Horse Racing Board, exclusive of fines, penalties, and unclaimed tickets, a sum to be determined by a specified calculation shall be deposited into the Fairs and Exposition Fund, and, if the revenues thereby deposited are in excess of $13,000,000 in any fiscal year, one-half of the amount in excess shall be transferred to the General Fund. Existing law also provides that any unallocated balance remaining in this fund is continuously appropriated for allocation by the Secretary of Food and Agriculture for specified capital improvements and operational support at California fairs. This bill would provide that the excess satellite wagering license fee revenues that are currently transferred directly to the General Fund pursuant to (2) shall instead be transferred to the Fair and Exposition Fund, and shall be subject to the calculation, distribution, and continuous appropriation described in (3). This bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. 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) Except as otherwise provided in Section 19606.3, all revenues distributed to the state as license fees from satellite wagering facilities shall be deposited in a separate account in the fund and, notwithstanding Section 13340 of the Government Code, are continuously appropriated from that account 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 provision of 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 of Food and Agriculture 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 payment of expenses incurred in establishing and operating satellite wagering facilities at fairs. (4) For the support of an equipment and operating fund to produce and display a consolidated California signal at satellite wagering facilities and fairs. (5) For health and safety repair projects at fairs, which includes fire and life safety improvement projects, California Code of Regulations compliance projects, and long-term deferred maintenance projects. (6) For the development and payment of revenue generating projects, 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 of Food and Agriculture 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) Approval of the Joint Committee on Fairs Allocation and Classification is deemed complete when one of the following conditions is met: (1) The annual budget act is enacted. (2) If the secretary's recommendations are received by the Joint Committee on Fairs Allocation and Classification after the enactment of the annual budget act, the recommendations 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) to (3), inclusive, of subdivision (a) shall be made before any transfer is made pursuant to subdivision (g). (g) Except as otherwise provided in subdivision (f), when the revenues deposited in the separate account exceed eleven million dollars ($11,000,000) in any fiscal year, 98 percent of the amount in excess of eleven million dollars ($11,000,000) shall be transferred to the Fair and Exposition Fund for allocation in accordance with Sections 19620.1 and 19630. (h) All of the costs of administering the accounts created by subdivision (a) and Section 19606.3 shall be charged to the respective accounts. SEC. 2. Section 19620.1 of the Business and Professions Code is amended to read: 19620.1. (a) From the total revenue received by the board, including revenues transferred from the Satellite Wagering Account pursuant to subdivision (g) of Section 19606.1, but excluding money received pursuant to Sections 19640 and 19641, the sum of two hundred sixty-five thousand dollars ($265,000) plus an amount equal to 63/100 of 1 percent of the gross amount of money handled in the annual parimutuel pool generated within this state, or the maximum amount received by the state from the parimutuel pool of a racing meeting held in this state, whichever is less, shall be paid into the State Treasury to the credit of the Fair and Exposition Fund. If the revenues paid into the Fair and Exposition Fund under this section are in excess of thirteen million dollars ($13,000,000) in any fiscal year, one-half of the amount in excess of the thirteen million dollars ($13,000,000) shall be transferred to the General Fund. (b) From the total revenue received by the board, exclusive of money received pursuant to Sections 19640 and 19641, and in addition to the funds paid into the State Treasury to the credit of the Fair and Exposition Fund as specified in subdivision (a), the Legislature shall annually appropriate and the board shall deposit to the credit of the Fair and Exposition Fund, such sums as it deems necessary for the following purposes: (1) For the support of the board, including any costs and expenses incurred by the Attorney General in the enforcement of this chapter as shall be authorized by the board, including, compensation including any fringe benefits paid to stewards and to the official veterinarian, and an amount not less than the amount expended in the 1994-95 fiscal year for the costs of laboratory testing related to horse racing pursuant to Section 19580. (2) To the Department of Food and Agriculture for the oversight of the network of California fairs receiving money from the fund. (3) To the Department of Food and Agriculture for the contributions, or the cost of benefits in lieu of contributions, payable to the Unemployment Fund by the network of California fairs receiving funds pursuant to this article, as a result of unemployment insurance coverage pursuant to Section 605 of the Unemployment Insurance Code. (4) To the Department of Food and Agriculture for the auditing of all district agricultural association fairs, county fairs, and citrus fruit fairs. SEC. 3. 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 rectify a mistake in existing law that would create an eleven million dollar ($11,000,000) windfall in the "Satellite Wagering Fund" and an eleven million dollar ($11,000,000) shortfall in the "Fairs and Expositions Fund" it is necessary for this act to take effect immediately so that the Joint Committee on Fairs Allocation and Classification can include the changes from this act in the fairs budget.