BILL ANALYSIS �
AB 1204
Page 1
Date of Hearing: January 11, 2012
ASSEMBLY COMMITTEE ON AGRICULTURE
Cathleen Galgiani, Chair
AB 1204 (Dickenson) - As Amended: January 4, 2012
SUBJECT : Fairs: California Exposition and State Fair Authority.
SUMMARY : Changes California Exposition and State Fair (Cal
Expo) to an independent governing body. Specifically, this
bill :
1)Makes legislative findings about Cal Expo's history and
future.
2)Declares the intent of the Legislature for Cal Expo to
reorganize as a separate, independent entity.
3)Requires the Board of Directors (Board) for Cal Expo to
establish a policy to ensure fiscal independence.
4)Requires the Board to establish and maintain a policy that
provides for an agricultural themed exposition that celebrates
California and its diverse population, while showcasing
California's agricultural industries, past and future.
5)Requires Cal Expo's general manager (GM) to be the Chief
Executive Officer of Cal Expo.
6)Requires Cal Expo's Deputy GM, Program Manager, and Marketing
Manager to be selected by the Board and, upon the Boards'
recommendation, be appointed by the Governor.
7)Requires Cal Expo to hold an annual fair in Sacramento County
to showcase California's agricultural industry in accordance
with Cal Expo being a separate, independent entity.
8)Requires Cal Expo to annually report to the State Fair Leasing
Authority (SFLA), all events and operations of the preceding
year and Cal Expo's financial condition.
9)Requires Cal Expo's finances to be audited annually by an
independent registered, certified public accountancy (CPA)
firm.
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10)Allows Cal Expo, subject only to conditions specified in this
chapter, to make contract in accordance with the following:
a) Requires the Board to develop, maintain, and comply with
its own written policy and procedures in contracting,
subject to California Constitution requirements.
b) Requires the Board to incorporate, for contracts or
procurements by Cal Expo, the following:
i) Requires the Board to adopt and publish competitive
bidding procedures (CBP) for contracts or procurements
that exceed $100,000.
(1) Requires CBP to include, but not be limited
to, requirements for bids submission and
documentation, guidelines for use of request
proposals, invitation or bid or other bidding methods,
and a bid protect procedure.
(2) Requires the GM of Cal Expo to determine if
goods and services are available through existing
contracts or price schedules of the Department of
General Services (DGS).
ii) Requires Cal Expo rules for contracts to apply to
subcontracts exceeding $100,000.
(1) Requires the Board to establish, as part of
its CBP, subcontracting guidelines.
iii) Subjects the Board to the Small Business Procurement
and Contract Act; and,
iv) Requires the Board and GM, when advertising or
awarding a general contract of more than $100,000, to
ensure all bidders and contractors have a specific plan
to use subcontracts with socially and economically
disadvantaged small businesses.
(1) Requires the subcontracting plan to detail the
nature and extent of the services to be used and, if
known, then names of the business or individual
subcontractors.
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(2) Defines socially and economically
disadvantaged persons for the purpose of this chapter.
v) Requires the Board, along with the annual financial
report, to prepare a report of the fair's purchases
through DGS, and the listing of contracts awarded for
more than $100,000, the name of the contractor, the
amount and term of the contract(s), and the basis for the
contract(s); and,
vi) Requires Cal Expo to comply with its contracting
requirements and have sole authority for contracting.
c) Allows the Board to purchase services from any business,
city, county or state department.
11)Allows the Board to purchase or lease goods and services as
necessary.
12)Requires the Board to establish a separate account for
depositing funds received by SFLA in the course of its
business, and all funds maintained in the SFLA account are to
be appropriated to the Board and SFLA to carry out business
operations.
13)Allows the Board to delegate to officers and employees of Cal
Expo the independent authority to appoint civil service
personnel.
14) Allows the Board to delegate to officers and employees of
Cal Expo the independent authority to appoint all necessary
police.
15)Transfers approval powers from DGS to SFLA, in financial
matters relating to the use of Cal Expo property. These
powers include the purchasing, acquiring, disposing, holding,
improving, leasing, and/or permanent improvements of real or
personal property owned by Cal Expo.
16)Transfers approval powers from DGS to SFLA, in financial
matters related to Cal Expo's pledges or bonds. These powers
include pledge any of its properties and 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.
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17)Deletes requirements for the Board to annually report to the
Legislature on Cal Expo's finances, operations and plans for
future activities at Cal Expo.
18)Changes the common powers authorized to SFLA, from a district
agriculture association (DAA), to those of the parties
involved in SFLA.
19)Allows SFLA to use Cal Expo staff or employ other staff to
carry out the purposes of SFLA.
20)Allows the GM of the Cal Expo to serve in any capacity to the
SFLA, as determined by the chairperson of the SFLA Board.
21)Requires proceeds of any lease, sale or other financial
agreements pursuant to this chapter to be the property of Cal
Expo and be available to Cal Expo in perpetuity.
22)Makes change in regards to Cal Expos preparation of a Master
Plan specifically removing the Joint Legislative Budget
Committee from the review process.
EXISTING LAW creates, as an entity in state government with
sufficient autonomy for efficient operation, Cal Expo for the
purpose of providing for innovative programs including the
concept of an agriculturally themed exposition, while working
towards a goal of fiscal independence from state General Fund
support. Granted authority to the Cal Expo Board of Directors
to operate and maintain Cal Expo. (Food and Agriculture Code
section (FAC) 3301-3334)
Allows Cal Expo to make financial decisions regarding the Cal
Expo fairgrounds, with the approval of DGS. (FAC 3332)
Creates SFLA for the purpose of entering into leases or other
agreements for the use of the Cal Expo race track, or any other
property owned or controlled by Cal Expo, and to create a
long-term infrastructure master plan for the development and
improvement of Cal Expo. Creates SFLA board, made up of the
directors of Department of Finance, DGS, CDFA and four members
of the Cal Expo Board. (FAC 3351 - 3361)
FISCAL EFFECT : Legislative Counsel has keyed this bill fiscal.
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COMMENTS : According to discussion with the Author's office and
Cal Expo, this bill will clearly define Cal Expo as an
independent entity in state government. This would be the first
stage of giving Cal Expo the flexibility to operate the state
fairgrounds as a business enterprise. The greater independence
sought by this bill includes changing Cal Expo's current
procurement and contracting rules to conduct business more
efficiently. Furthermore, this bill would shift DGS's approval
authority over fiscal matters related to the selling, purchasing
or leasing of Cal Expo property to SFLA. Supporters state that
these changes are needed to aid Cal Expo in gaining new revenue
streams and streamline business operations.
Currently Cal Expo has a backlog of deferred maintenance in
excess of $45 million and supporters think this bill is an
important step in securing funding to help Cal Expo upgrade it
facilities. Supporters state this bill is the first step in
helping Cal Expo to preserve and create jobs, improve its
property and grow its business.
This bill grants Cal Expo a wide range of independence. It
allows the Board to select the deputy GM, program manager and
the marketing manager, while under current law the Board may
make recommendations to the Governor for those three positions.
This bill replaces standard state procurement and contracting
rules for Cal Expo with the procurement and contracting rules
associated with the California State Lottery. This bill removes
Cal Expo's financial reporting requirements to the Legislature
and removes the Legislature from the review process of Cal
Expo's Master plan. Finally, this bill removes DGS as the
approval authority for financial matters associated with Cal
Expo and gives the approval authority to SFLA. All of these
changes will make Cal Expo an independent agency within
California State Government with a much different relationship
to the Legislature and state agencies.
The Governor is preparing a plan to alleviate financial and
structural issues related to the State Fair system. The
committee may wish to consider if it would be prudent to see
what the Governor's proposals are and if they could be applied
to Cal Expo's situation.
The committee may wish to consider if granting SFLA and Cal Expo
the control, use and profits of the Cal Expo property would be a
practical direction to take state policy. This bill expands
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SFLA powers and is a significant change in current state policy
of DGS maintaining oversight of state property.
This bill grants SFLA, a seven member board with four members
from the Cal Expo Board, oversight of Cal Expo's business
operations. Furthermore, this bill removed most oversight
responsibility from both the executive and legislative branches
of State government. To provide adequate oversight for the
possible purchase, sale or lease of Cal Expo property the
committee may wish to consider amending this bill to require DGS
approval for the sale of Cal Expo land and leases exceeding five
years.
RELATED CURRENT LEGISLATION : SB 1 (Kehoe) of 2011 would, among
other things, authorize DGS to sell all or any portion of the
real property that comprises the portion of the 22nd DAA,
commonly known as the Del Mar Race Track and Fairgrounds, and
related personal property to the City of Del Mar. This bill is
currently in the Senate Committee on Rules and the Senate
Committee on Governmental Organization.
SB 899 (La Malfa) of 2011 would delete the requirement that a
DAA obtain the approval of DGS to exercise the powers granted to
it. This bill's hearing in the Assembly Committee on
Agriculture, on June 29, 2011, was cancelled by the author.
RELATED PREVIOUS LEGISLATION : SB 1085 (Runner), Chapter 320,
Statutes of 2010, allowed the 50th DAA, commonly known as the
Antelope Valley Fair, with the consent of the Secretary of CDFA,
to enter into a joint powers agreement for the purpose of
operating, maintaining and improving the 50th DAA.
SB 1041 (Denhem) of 2006 would have transferred, from DGS to
CDFA, the responsibility to annually prepare a program for DAAs
for delegating purchasing authority to DAAs. This bill was held
on suspense in the Assembly Committee on Appropriations.
REGISTERED SUPPORT / OPPOSITION :
Support
California Exposition and State Fair (Sponsor)
American Federation of State, County and Municipal Employees,
ALF-CIO (AFSCME)
AB 1204
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Opposition
None on file.
Analysis Prepared by : Victor Francovich / AGRI. / (916)
319-2084