BILL ANALYSIS �
SENATE COMMITTEE on AGRICULTURE
Senator Cathleen Galgiani, Chair
BILL NO: AB 1647 HEARING: 06/17/14
AUTHOR: Bigelow FISCAL: Yes
VERSION: 03/28/14 CONSULTANT: Anne Megaro
Fairs: Department of Food and Agriculture.
SUMMARY :
This bill would repeal the requirement that specified fairs
report the number of credential and courtesy passes issued.
This bill would repeal requirements that the California
Department of Food and Agriculture expend funds relating to
exhibits.
BACKGROUND AND EXISTING LAW :
California fairs have been in existence since 1854 and have
since grown to encompass 78 fairs statewide. This network of
California fairs is composed of 52 district agricultural
associations (DAA), 23 county fairs, 2 citrus fruit fairs, and
The California Exposition and State Fair (Cal Expo). DAAs are
state government entities that are governed by nine-member
gubernatorial appointed boards of directors. In contrast,
county fairs are county government or not-for-profit
organizations; citrus fruit fairs are not-for-profit
organizations; and Cal Expo is a state agency.
In 2009, California fairs generated a $2.85 billion economic
impact from consumer sales, $855 million in income for
California employees, $127 million in annual state and local tax
revenues, and provided 25,000 jobs. Fairs serve the local
community by providing a venue for a variety of agricultural and
local community events such as livestock shows and competitions,
county fairs, trade shows, exhibits, and food, nutrition, and
agricultural education. Fairgrounds also serve the state by
assisting in emergency preparedness and response. In the event
of natural disasters, fairgrounds may be transformed into
command centers for CalFire, CalEMA, Homeland Security, law
enforcement, and FEMA and also provide shelter for displaced
persons and their pets and livestock.
The Division of Fairs and Expositions within the California
Department of Food and Agriculture (CDFA) provides fiscal and
policy oversight for the network of California fairs, and the
Department of General Services (DGS) provides oversight for use
of state property, procurement, and services contracts (Business
and Professions Code �19400 et seq.; Food and Agricultural Code
AB 1647 - Page 2
�3001 et seq.).
The source of state funding for these fairs has historically
been dependent on horse racing license fees, which in recent
years have significantly declined. In 2009, the legislature
recognized the need for a new source of funding for the
continuation of fairs and, thus, continuously appropriated $32
million from the state's General Fund to be paid into the Fairs
and Exposition Fund (F&E Fund) [SB 16 X2 (Ashburn)].
However, the 2011-12 state budget eliminated General Fund
contributions to the F&E Fund, requiring DAAs to be
self-sufficient as of January 1, 2012. Since that time, several
bills have been introduced and proposals have been discussed
that aim to reduce DAA operating and administrative costs.
Given that DAAs are state entities, these proposals have
generally focused on reducing state oversight and specified
requirements while increasing local decision-making and
flexibility.
PROPOSED LAW :
This bill:
1. Repeals the requirement that DAAs annually report to
CDFA the total number of credential and courtesy passes
offered at the fair.
2. Repeals the requirement that CDFA expend up to $100,000
on exhibits at fairs to demonstrate how food and fiber is
produced and used in the state.
3. Repeals the requirement that CDFA expend up to $15,000
annually to provide a conference of fair judges to help
determine regulations for the judging of exhibits and for
determining the amount of premiums paid for exhibits.
COMMENTS :
Need for this bill: According to the author, "The Governor has
slashed the Fair and Exposition Fund completely, drying up our
rural fairs' funding foundation for the foreseeable future. It
is imperative the legislature and Governor act to alleviate any
cost pressures county fairs are facing." Specifically, this
bill would remove the annual credential and courtesy passes
reporting requirement, the requirement that CDFA fund exhibits
highlighting food production, and the requirement that CDFA
provide for an annual conference for fair judges.
AB 1647 - Page 3
The Senate Committee on Agriculture held an informational
hearing in 2012 titled "The Future of Fairs in California" to
examine the financial status of fairs and discuss alternative
funding solutions to ensure the vitality of California fairs.
Testimony from fair industry representatives acknowledged that
many smaller fairs were at risk of closing if alternative
funding strategies and/or governance structures were not
utilized.
RELATED LEGISLATION :
AB 2490 (Eggman) of 2014. Would revise the oversight
responsibilities of CDFA and DGS in regards to district
agricultural associations, and would make conforming changes.
Currently in the Senate Committee on Agriculture.
SB 741 (Cannella) of 2013. Would revise the duties,
responsibilities, and powers of the California Department of
Food and Agriculture, the Department of General Services, and
district agricultural associations in regards to the operation,
oversight, administration, governance, and funding of the
network of California fairs. In the Assembly Committee on
Appropriations.
AB 2345 (Ma) of 2012. Would have established the California
Fair Network Commission as a nonprofit, mutual-benefit
corporation to assess fees for services, manage funds, and
provide administration and oversight of California's fairs. Held
in Assembly Committee on Appropriations.
AB 95 (Budget), Chapter 2, Statutes of 2011. Repeals the $32
million annual General Fund appropriation for the support of the
network of California fairs.
SBX2 16 (Ashburn), Chapter 12, Statutes of 2009-10 Second
Extraordinary Session. Provides that horse racing license fees
no longer be paid into the Fairs & Expositions Fund, and instead
provides that beginning July 1, 2009, $32 million shall be
continuously appropriated from the state General Fund to the
Fairs and Exposition Fund for the support of the network of
California fairs.
SB 1085 (Runner), Chapter 320, Statutes of 2010. Allows the
50th DAA, with consent of the secretary of CDFA, to enter into a
joint powers agreement with a nonprofit organization to operate,
maintain, and improve the 50th DAA.
AB 1647 - Page 4
AB 2250 (Runner), Chapter 452, Statutes of 2008. Authorizes
officers and employees of DAAs to receive compensation from
nonprofit corporations.
SB 281 (Maldonado), Chapter 346, Statutes of 2007. Requires CDFA
to develop criteria to be used for the disposal of property by a
DAA and Cal Expo.
SB 1041 (Denham) of 2006. Would have transferred responsibility
from DGS to CDFA for preparing a program for DAAs for delegating
purchasing authority. Held in Assembly Committee on
Appropriations.
PRIOR ACTIONS :
Assembly Floor 78-0
Assembly Appropriations 17-0
Assembly Agriculture 7-0
SUPPORT :
Rural County Representatives of California
Western Fairs Association
OPPOSITION :
None received