BILL ANALYSIS �
AB 2345
Page 1
Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2345 (Ma) - As Amended: March 29, 2012
Policy Committee: AgricultureVote:8
- 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates a California Fair Network Commission (CFN
commission) to provide a new governance structure for fairs in
California. Specifically, this bill:
1)Requires the CFN commission oversight to include:
a) Monitoring the solvency of the F&E Fund.
b) Distributing available state funds to California's fairs
based upon criteria developed by the CFN commission, in
consultation with the secretary, which may not include
consideration of individual fairs' governance structure.
c) Creating a framework for the administration of
California's network of fairs allowing for autonomy and
local authority, and overseeing annual fiscal audits and
periodic compliance audits.
d) Assisting fairs in funds from other sources.
e) Supporting ongoing improvements of fair programs.
f) Developing procedures for contract administration and
approval, and, other administrate functions.
2)Allows the CFN commission to assess fees for service and
administrative oversight.
3)Declares the CFN commission to be a separate, independent
California mutual benefit corporation, requires the CFN
commission staff to be employees solely of the CFN commission,
and exempts procedures adopted by the CFN commission from the
administrative procedure act.
4)Requires the secretary of the California Department of Food
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and Agriculture (CDFA), 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. Exempts procedures adopted by the secretary for
the CFN commission from the Administrative Procedure Act.
5)Requires the CFN commission to be administered by an executive
director.
FISCAL EFFECT
1)Under this proposal, approximately $2.1 million per year in
Fair and Exposition Fund revenue would shift from CDFA to the
privately run CFN commission. In addition, that shift would
result in the loss of at least 13 civil service jobs at CDFA.
2)This bill calls for a three year transition period where CDFA
will continue to oversee the fairs and work with the CFN
commission. It is likely this transition period will require
about $500,000 GF annually.
COMMENTS
1)Purpose . The intent of this legislation is to shift management
and oversight of California's network of fairs from CDFA to a
newly created, independent, non-profit organization (the CFN
commission). According to the author, the fairs are looking
for a new governance structure that will help them to grow and
thrive. 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.
2)Governor's Plan for the State's Fairs . The administration is
currently evaluating the future structure of oversight and
control over the fairs. A comprehensive proposal that
includes Cal Expo is expected from the administration.
In addition, there are 42 state-owned fairgrounds, including
Cal-Expo. Part of the overall solution is expected to include
ways in which these properties can be better managed to
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increase revenue and assist with deferred maintenance.
Moreover, the Little Hoover Commission will soon issue its
recommendations for the future of the fairs and will address
the overall financial and structural problems associated with
the state's network of fairs, including Cal Expo.
3)California's Network of Fairs . The network of California fairs
includes 80 fair organizations divided into four categories:
a) 52 active District Agricultural Associations (DAA) -
state government entities,
b) 23 county fairs - county government or not-for-profit
organizations,
c) 2 citrus fruit fairs - not-for-profit organizations,
d) the California Exposition and State Fair (Cal Expo) - a
state agency,
4)Funding for the State's Network of Fairs . Prior to the
2009-2010 budget, the state's network of fairs and Cal Expo
were funded in part through horse racing licensing fees.
However, SB 16 X2 (Ashburn, Statutes of 2009) removed that
funding stream and declared that beginning on July 1, 2009,
and annually thereafter, $32 million would be appropriated
from the state's General Fund and paid into the Fair and
Exposition Fund for the financial support of Cal Expo and the
network of California fairs. Given the state's dire fiscal
situation, the 2011-12 budget eliminated the $32 million in GF
support for the fairs and the proposed 2012-13 budget does not
include any GF support for the fairs. Thus the support for the
fairs for 2011-12 was limited to the local assistance funding
in the Fairs and Expositions fund. The Governor's proposed
2012-13 budget contains no funding for the fairs.
Fairs' operating budgets were comprised of locally generated
revenue and state support. The amount of GF dollars each fair
received varied depending on the size of its operating budget.
Fairs that have smaller operating budgets received a greater
amount of General Fund support.
5)Related Legislation . In this session, AB 1204 (Dickinson)
proposed to expand the authority of the State Fair Leasing
Authority (SFLA) by shifting the California Exposition and
State Fair (Cal Expo) in its entirety from the state to SFLA.
That bill was held on this committees suspense file.
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Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081