BILL ANALYSIS �
AB 2345
Page 1
Date of Hearing: April 25, 2012
ASSEMBLY COMMITTEE ON AGRICULTURE
Cathleen Galgiani, Chair
AB 2345 (Ma) - As Amended: March 29, 2012
SUBJECT : Fairs: sustainability.
SUMMARY : This bill would create a California Network of Fairs
Commission (CNF commission) to provide a new governance
structure for fairs in California. Specifically, this bill :
1)Makes legislative findings and declarations of all the
following:
a) The Network of California fairs (NCF) is a unique
resource for the State (state) of California and needs to
be protected and preserved;
b) NCF is the largest in the nation and includes 72
fairgrounds which showcase and support California, as
specified;
c) NCF of fairs host more than 30 million visitors annually
and provides a tourism attraction for the state;
d) NCF provides more than 30,000 jobs and over $165 million
in state and local tax revenues;
e) The budget for NCF has not kept pace with California's
population and growing demand, which has led to deferred
maintenance, inadequate staffing levels, and a failure to
protect and maintain fair resources and properties;
f) Declining budgets resources will force the closure of
fairs throughout the state, causing a loss of jobs and
diminish use of fairgrounds as staging areas for emergency
responders;
g) It is in the public interest that NCF continues to
promote agriculture and commerce, provide jobs, and provide
facilities for emergency services during natural disasters;
h) State funding for NCF, while important, is no longer
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sufficient to meet the levels of funding to maintain and
operate the fair network; and,
i) For a period of three years, as fairs transition from
state funding, it is necessary for the state to provide
minimal levels of funding to NCF to ensure an ordered
transition.
i) It is in the state's public interest and vital
to the state's economy to improve the fair's facilities
and expand access through a partnership funded in part
by the state;
ii) A CFN commission, established by this act, is
intended to have a unique role in assisting in the
opportunity to expand and improve NCF, and increase the
opportunity for Californians to benefit from NCF and
the industries that support NCF.
iii) Programs implemented by the CFN commission are
intended to enhance the marketing activities of
individual fairs within NCF;
iv) The CFN commission programs are intended to help
fairs of all sizes;
v) The CFN commission programs are not intended to
prevent the ability of any fair to conduct their own
activities to increase market share of NCF, nor does it
prevent any fair from seeking to expand its market
though alternative and/or complementary means;
vi) The CFN commission is created to fund oversight
of NCF and the promotion, as specified, of specific
government goals, as established by the Legislature,
and, results in programs that provide uniformity of
regulations and oversight and chance for growth for the
entire NCF;
vii) Programs carried out by the CFN commission are
required to be effective and coordinated, to strengthen
NCF, local communities and the state economy; and,
viii) Independent review of the effectiveness of the
CFN commission's programs will assist the legislative
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oversight of the programs.
2)Defines Commission to mean CFN Commission.
3)Defines Department to mean the Department of Food and
Agriculture (CDFA).
4)Defines Fair to mean a state designated fair.
5)Defines Network to mean NCF.
6)Defines Person to means an individual, public entity, firm,
corporation, association, or any
other business unit, whether operating on a for-profit or
non-profit basis.
7)Defines Secretary (secretary) to mean the Secretary of CDFA.
8) Makes a legislative declaration and finding that the CFN
commission, in consultation with the secretary, is responsible
for ensuring the integrity of the Fair and Exposition (F&E)
Fund, allocating funds to NFC, and, providing oversight of
activities of each California fair.
9)Requires the CNF commission oversight to include, but not be
limited to:
a) Monitoring the solvency of the F&E Fund;
b) Distributing available state funds to NFC based upon
criteria developed by the CNF commission, in consultation
with the secretary, which may not include consideration of
an individual fairs governance structure;
c) Creating a framework for the administration of NFC
allowing for autonomy and local authority, and overseeing
annual fiscal audits and periodic compliance audits;
d) Guiding and providing incentive to fairs to seek funds
from other sources;
e) Supporting ongoing improvements of fair programs to
ensure that California fairs remain a relevant community
institution; and,
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f) Developing procedures for contract administration and
approval, and, other administrate functions.
10)Allows the CFN commission to assess fees for service and
administrative oversight, as specified.
11)Declares the CFN commission to be a separate, independent
California mutual benefit corporation, and,
a) Requires the CFN commission staff to be employees solely
of the CFN commission; and,
b) Exempts procedures adopted by the CFN commission from
the administrative procedure act.
12)Requires the CFN commission to adopt procedures relating to
the operation of the CFN commission within six months of
enactment of this act.
13)Requires the secretary, if the CFN commission has not adopted
procedures within the allotted timeframe, to adopt procedures
relating to the operation of the CFN commission to be used
until such time as the CFN commission adopts its own
procedures.
a) Exempts procedures adopted by the secretary for the CFN
commission from the Administrative Procedure Act.
14)Requires the CFN commission to be administered by an
executive director (director).
a) Requires the director to be a fair industry
professional, recommended by a vote of the CFN
commissioners and approved by the Governor.
b) Requires the director to serve at the pleasure of the
CFN commissioners.
15)Requires the director to report to and receive guidance from
the CFN commission and to implement the CFN commission's plan.
16)Requires the director to report to the secretary for the
day-to-day managerial and financial responsibilities.
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17)Requires the CFN commission, with approval of the secretary,
to set the salary and benefits of the director, based upon
fair industry standards of executive pay. Requires the
director's salary and benefits to be paid from commission
revenues.
18)Requires all the powers of the CFN commission, including
collecting and depositing revenues, to be the responsibility
of the secretary, and when not exercised by the secretary,
allows the powers to be exercised by the CFN commission.
EXISTING LAW:
1)Defines 54 District Agriculture Associations, 24 county fairs,
two citrus fruit fairs, a Joint Powers Authority, a nonprofit
organization, and, the California Exposition and State Fair,
as state designated fairs.
2)Provides for the establishment of a separate, independent,
nonprofit corporation named the California Travel and Tourism
Commission (CTTC). The purpose of CTTC is to increase the
number of persons traveling to and within California.
3)Allows various marketing and promotion commissions to promote
the production and marketing of California agricultural
commodities. Marketing commissions have a variety of powers
covering promotion, advertising, education, production or
post-harvest research, and quality standards and inspections.
Marketing commissions cover a variety of commodities.
FISCAL EFFECT : This bill is keyed fiscal by Legislative
Counsel.
COMMENTS : California is home to 78 fairs that are
interconnected and operate as a network. According to the
author, NCF collaborates on a multitude of mutually beneficial
programs for optimum efficiency. Supporters state the benefits
of NCF include: positive economic impacts locally and for the
state; meeting public needs by providing a place of gathering,
cultural centers, and affordable community facilities; emergency
response capabilities and disaster preparedness; and, food,
nutrition and agricultural education and awareness.
Prior to 2010, the primary source of state funding for NCF was
from horse racing license fees. The steady decline in license
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fees prior to 2010 had resulted in a deficiency in revenues
generated to the F&E Fund, which impacted fairs across the
state.
SB 16 X2 (Ashburn), Chapter 12, Statutes of 2009, provided a
stable funding source to the fairs by allocating an annual
appropriation of $32 million from the state's general fund (GF)
to support NCF. In the 2011-12 state budget the GF support was
eliminated, and for the first time in 80 years, California fairs
had to depend completely on self-generated revenues to operate,
beginning January 1, 2012.
Fairs are now looking for a governance structure that will help
the fairs to grow and thrive in the new environment. The author
states that the goal of this bill is to implement a new
governing and oversight structure for the fair network to keep
it sustainable.
The proposed CFN Commission, which has similarities to CTTC, is
a first step towards providing a new governance structure for
NCF. The bill provides definitions for a CFN commission, some
powers and duties for a CFN Commission, and rules for the
appointment and duties of a director. The bill does not address
many of the structural and governance issues related to most
commissions, including, but not limited to, the following:
1)How does the CFN commission come into operation? Most
commissions that are allowed to assess fees are made
operational by a referendum by persons or businesses that will
be assessed. This bill does not describe a referendum
process, who would be allowed to vote, or what the vote
threshold is for passage of a referendum.
2)Who will be affected by assessments fees? The bill does not
specify who will be assessed by a CFN commission, the amount
of an assessment fee, or penalties for failure to pay the fee.
3)What is the makeup of the CFN commission's board?
Commission's boards are typically elected or appointed, and
have some expertise in the commission's subject area. This
bill does not describe the qualifications for a commissioner,
how many commissioners will be on the board, elected or
appointed terms of commissioners, or, how commissioners are
elected or appointed.
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The author's office and supporters have stated that this bill is
a work in progress and plan to address these and other issues if
the bill moves forward.
REGISTERED SUPPORT / OPPOSITION :
Support
Western Fairs Association
Opposition
Orange County Fairgrounds Preservation Society
Analysis Prepared by : Victor Francovich / AGRI. / (916)
319-2084