BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 35
                                                                  Page  1

          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 35 (Solorio) - As Amended:  April 7, 2011 

          Policy Committee:                              Business and 
          Professions  Vote:                            9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill authorizes the Board of Directors of the Orange County 
          Fair (OCF), or its agent, to enter into a revenue sharing plan 
          with the state for the fairgrounds property if the plan 
          generates in excess of $100 million. 

           FISCAL EFFECT  

          Given all the work that the Department of General Service has 
          done to date regarding the potential sale of this site (see 
          below), if the state elected to instead pursue a cost sharing 
          agreement, administrative costs would likely not exceed 
          $100,000. 

           COMMENTS  

           1)Background  . ABX4 22 (Evans)/Chapter 20 of 2009, a trailer bill 
            to the 2009-10 Budget Act, authorized DGS to sell the OCF. In 
            October 2009, DGS began soliciting bids for the OCF sale. The 
            highest bid of $56.5 million was far below the assumed value 
            of $96 million to $180 million. In March 2010, the department 
            rejected all bids for the sale, and the state commenced 
            negotiations with the City of Costa Mesa for sale of the 
            property.  In August 2010, DGS again put the OCF property out 
            to bid, and Facilities Management West (FMW) was selected as 
            the winning bidder.  A lawsuit was then filed by a competing 
            bidder, and the author and other officials and business 
            leaders filed a second lawsuit challenging the sale to FMW. A 
            hearing on these lawsuits was to occur in early May. 

           2)Purpose  . According to the author's office, "AB 35 would allow 








                                                                 AB 35
                                                                  Page  2

            the state to keep this important asset, but still generate 
            revenue to replace the amount projected by the proposed �OCF] 
            sale.  During a time of economic crisis, all possibilities 
            should be on the table.  A revenue-sharing plan could mean a 
            win-win.  The State would still own the fairgrounds and 
            generate revenue at least equal to what was proposed through a 
            sale, and Orange County residents could keep OCF."

           3)Suggested Amendments  . The bill should be amended to (a) 
            clarify that the $100 million is revenue to the state; (b) 
            place a 40-year time limit on receipt of the revenue; and (c) 
            require that the terms of any proposed revenue-sharing 
            agreement be submitted to the Joint Legislative Budget 
            Committee at least 30 days prior to entering into an 
            agreement.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081