Amended in Assembly April 24, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2490

Introduced by Assembly Member Eggman

February 21, 2014

An act to amend Sections 3954, 3960, 3965, 3965.1, begin delete and 4051.2 of, and end delete begin insert 4051.2, and 4057 of, end insert to repeal Section 4053 of, begin insert and to repeal and add Section 4051 of, end insert the Food and Agricultural Code, to amend Section 13332.09 of the Government Code, and to repeal begin delete Section end delete begin insert Sections end insert 10320 begin insert and 10321 end insert of the Public Contract Code, relating to district agricultural associations.

LEGISLATIVE COUNSEL’S DIGEST

AB 2490, as amended, Eggman. District agricultural associations.

begin delete

Existing

end delete

begin insert (1) end insert begin insert   end insert begin insert Existing end insert law divides the state into agricultural districts, and provides for the management of these districts by district agricultural associations. Existing law provides for a board of directors for each district agricultural association, and provides for the appointment of each director by the Governor. Existing law sets forth the duties and responsibilities of the board of directors and the district agricultural associations, begin delete including that a district agricultural association requires the approval of the Department of Food and Agriculture prior to entering into a settlement agreement for an amount greater than $10,000. end delete begin insert and requires a district agricultural association to take certain actions only with the approval of the Department of Food and Agriculture or the Department of General Services, or both. end insert

This bill would authorize the Governor to remove any director of a district agricultural association for cause prior to the expiration of the director’s term. The bill would revise the oversight responsibilities of the Department of Food and Agriculture and the Department of General Services begin delete by allowing a district agricultural association to enter into settlement agreements for less than $100,000 without the prior approval of the Department of Food and Agriculture and by deleting the requirements that a district agricultural association obtain approval of the Department of Food and Agriculture or the Department of General Services prior to exercising the power to sue, or contracting or exercising powers over its own real or personal property. end delete begin insert in connection with district agricultural associations by deleting the requirement that a district agricultural association obtain approval of the Department of Food and Agriculture or the Department of General Services prior to exercising certain powers, including the power to sue, entering into a settlement agreement for less than $100,000, or contracting or exercising certain powers over its own real or personal property. The bill would require a district agricultural association to comply with specified contracting procedures, including, among others, soliciting bids in writing if the cost of a project exceeds $25,000. The bill would authorize the board of directors of a district agricultural association, with the approval of the Department of General Services, to purchase, acquire, hold, sell, exchange, or convey any interest in real property. The bill would require a district agricultural association to adopt a fiscal review policy that would provide for annual audits, as specified. end insert

begin delete

Existing

end delete

begin insert (2) end insert begin insert   end insert begin insert Existing end insert law requires the Department of General Services to exercise oversight of the acquisition and replacement of motor vehicles and other mobile property by a state agency. Existing law defines “state agency” for purposes of those provisions.

This bill would exclude district agricultural associations from the definition of “state agency” for purposes of those provisions.

begin delete

Existing

end delete

begin insert (3) end insert begin insert   end insert begin insert Existing end insert law requires the Department of General Services to annually prepare a delegation program for district agricultural associations, to be administered by the Department of Food and Agriculture and the Department of General Services. begin insert Existing law also requires the Department of Food and Agriculture, for district agricultural associations and other fairs, to develop criteria to be applied for purchases made locally at a price equal to or lower than the price available through the state purchasing program. end insert

This bill would repeal those provisions.

begin delete

This

end delete

begin insert (4) end insert begin insert   end insert begin insert This end insert bill would make begin delete other related changes end delete begin insert conforming end insert and nonsubstantive changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 3954 of the Food and Agricultural Code
is amended to read:

3954.  

Each association by its name has perpetual succession.
It may have a seal. An association may sue and be sued, and may
do any and all things necessary to carry out the powers and the
objects and purposes for which the association is formed.

SEC. 2.  

Section 3960 of the Food and Agricultural Code is
amended to read:

3960.  

The term of office of each director, except that of a
member of the first board, is four years from the beginning of the
term for which he or she is appointed. Any vacancy shall be filled
for the unexpired term. However, any director may be removed
for cause by the Governor prior to the expiration of the director’s
term.

SEC. 3.  

Section 3965 of the Food and Agricultural Code is
amended to read:

3965.  

The board may, with the approval of the department:

(a) Fix the term of office, the amount of bond, salary, and
prescribe the duties of the secretary and of the treasurer.

(b) Manage the affairs of the association.

(c) Make all necessary bylaws, rules, and regulations for the
government of the association.

(d) Delegate, as it may deem advisable, to its officers or
employees any of the powers that are vested in the board under
subdivision (b). Any delegation of power may be revoked at any
time.

SEC. 4.  

Section 3965.1 of the Food and Agricultural Code is
amended to read:

3965.1.  

Notwithstanding Section 3965 or 4051, the board,
without prior approval from the department, may arrange for and
conduct, or cause to be conducted, or by contract permit to be
conducted, any activity by any individual, institution, corporation,
or association upon its property at a time as it may be deemed
advisable, except for the following:

(a) Revenue generating contracts involving hazardous activities,
as determined by the department, unless adequate insurance
coverage is provided, as determined by the department in
consultation with the Department of General Services.

(b) The activities specified in Sections 4051.1 and 4051.2.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 4051 of the end insert begin insert Food and Agricultural Code end insert begin insert is
repealed. end insert

begin delete

4051.  

An association, with the approval of both the Department
of Food and Agriculture and the Department of General Services,
may do any of the following:

(a) Contract.

(b) Purchase, acquire, hold, sell, exchange, or convey any
interest in real or personal property and beautify or improve that
property. Any acquisition of land or other real property shall be
subject to the Property Acquisition Law (Part 11 (commencing
with Section 15850) of Division 3 of Title 2 of the Government
Code).

(c) Lease, let, or grant licenses for the use of its real estate or
personal property, or any portion of that property, to any person
or public body for whatever purpose may be approved by the board.

(d) Use or manage its real estate or personal property, or any
portion of that property, for any or all of the purposes of this section
jointly with any lessee, sublessee, or licensee, or otherwise use or
manage the property in connection with the lease, sublease, or
license which is made or granted.

(e) Lease or let its real property for public park, recreational,
or playground purposes.

(f) Rent or permit the use of its premises for any purpose which
is beneficial to the agricultural industry, including, but not limited
to, the holding of sales or auctions of cattle or other livestock.

(g) Contract with any county or county fair association for
holding a fair jointly with the county or county fair association.
The joint fair is a district fair of the association.

(h) Make permanent improvements upon publicly owned real
property adjacent to real property of the district when the
improvements materially benefit the property of the district.

(i) Pledge 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. The revenues, moneys, accounts, accounts receivable,
contract rights, and other rights to payment of whatever kind
pledged by the association or its assignees constitute a lien and
security interest which immediately attaches to the property so
pledged and is effective, binding, and enforceable against the
association, its successors, purchasers of the property so pledged,
creditors, and all others asserting rights therein, to the extent set
forth, and in accordance with, the terms and conditions of the
pledge, irrespective of whether those persons have notice of the
pledge and without the need for any physical delivery, recordation,
filing, or further act.

end delete

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 4051 is added to the end insert begin insert Food and Agricultural
Code end insert begin insert , to read: end insert

begin insert

begin insert 4051. end insert   

(a) An association may do any of the following:

(1) Contract, in accordance with all of the following:

(A) The written policies and procedures for contracting that
are developed and maintained by the board of directors of the
association in accordance with this section.

(B) All applicable state laws governing contracts, except as
follows:

(i) Any grant or contract entered into by an association for
goods is not subject to Chapter 2 (commencing with Section 10290)
of Part 2 of Division 2 of the Public Contract Code.

(ii) Any grant or contract entered into by an association is not
subject to Chapter 3 (commencing with Section 12100) of Part 2
of Division 2 of the Public Contract Code.

(C) If the estimated total cost of any construction project or
similar work carried out under this section exceeds twenty-five
thousand dollars ($25,000), the association shall solicit bids in
writing and shall award the work to the lowest responsible bidder
or reject all bids. The association is subject to all applicable
provisions of the Public Contract Code.

(D) An association may elect to become subject to the provisions
of the Uniform Public Construction Cost Accounting Act (Chapter
2 (commencing with Section 22000) of Part 3 of Division 2 of the
Public Contract Code) and the Small Business Procurement and
Contract Act (Chapter 6.5 (commencing with Section 14835) of
Part 5.5 of Division 3 of Title 2 of the Government Code), but
exempt from the reporting requirements noted in subdivision (f)
of Section 14838.1 of the Government Code.

(2) Accept funds or gifts of value from the United States or any
person to aid in carrying out the purposes of this part.

(3) Conduct or contract for programs, and contract for the
purchase or lease of goods that are necessary to effectuate the
purposes of this chapter, either independently or in cooperation
with any individual, public or private organization, or federal,
state, or local governmental agency.

(4) Establish and maintain a bank checking account or other
financial institution account, approved by the Director of Finance
in accordance with Sections 16506 and 16605 of the Government
Code, for depositing funds received by the district agricultural
association. All funds maintained in an account authorized by this
paragraph shall be used in accordance with Section 4001.

(5) Approve the annual budget of the association and establish
a program for paying vendors who contract with the district
agricultural association.

(6) Contract with any county or county fair association for
holding a fair jointly with the county or county fair association.
The joint fair is a district fair of the association.

(7) Make or adopt all necessary orders, rules, or regulations
for governing the activities of the association. Notwithstanding
Section 14, any orders, rules, or regulations adopted by the board
are exempt from Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code. For
informational purposes only, however, any order, rule, or
regulation adopted by the board may be transmitted to the Office
of Administrative Law for filing with the Secretary of State pursuant
to Section 11343 of the Government Code.

(8) Operate a payroll system for paying employees, and a system
for accounting for vacation and sick leave credits of employees.

(9) Delegate to the officers and employees of the association
the exercise of powers vested in the board, as the board may deem
desirable, for the orderly management and operation of the
association.

(10) With the approval of the Department of General Services,
purchase, acquire, hold, sell, or exchange, or convey any interest
in real property. Any acquisition of land or other real property
shall be subject to the Property Acquisition Law (Part 11
(commencing with Section 15850) of Division 3 of Title 2 of the
Government Code).

(11) With the approval of the Department of General Services,
make permanent improvements upon publicly owned real property
adjacent to, or near the vicinity of, the real property of the district
agricultural association when the improvements materially benefit
the property of the association pursuant to Section 11011 of the
Government Code.

(12) With the approval of the Department of General Services,
lease for the use of its real property, or any portion of that
property, to any person or public body for whatever purpose as
may be approved by the board.

(13) Use or manage any of its property jointly or in connection
with any lessee or sublessee, for any purpose approved by the
board.

(14) With the approval of the Department of General Services,
pledge any revenues, moneys, accounts, accounts receivable,
contract rights, and other rights to payment of whatever kind,
pursuant to terms and conditions approved by the board. The
revenues, moneys, accounts, accounts receivable, contract rights,
and other rights to payment of whatever kind pledged by the
association or its assignees constitute a lien or security interest
that immediately attaches to the property pledged, and is effective,
binding, and enforceable against the association, its successors,
purchasers of the property pledged, creditors, and all others
asserting rights therein, to the extent set forth, and in accordance
with, the terms and conditions of the pledge, irrespective of whether
those persons have notice of the pledge and without the need for
physical delivery, recordation, filing, or further action.

(15) With the approval of the Secretary of Food and Agriculture,
enter into a joint powers agreement pursuant to the Joint Exercise
of Powers Act (Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1 of the Government Code).

(b) In developing the written policies and procedures for
contracting, the board shall incorporate the following to apply to
contracts or procurement by the association:

(1) To ensure the fullest competition, the board shall adopt and
publish competitive bidding procedures for the award of a
procurement or contract involving an expenditure of more than
one hundred thousand dollars ($100,000). The competitive bidding
procedures shall include, but not be limited to, requirements for
submission of bids and accompanying documentation, guidelines
for the use of requests for proposals, invitations to bid, or other
methods of bidding, and a bid protest procedure. The general
manager shall determine whether the goods or services subject to
this paragraph are available through existing contracts or price
schedules of the Department of General Services. The Legislature
finds and declares that fairs are a valuable community resource
and recognizes that local businesses and local communities make
valuable contributions to fairs that include direct and indirect
support of fair programs. The Legislature further finds and
declares that local businesses often provide opportunity purchases
to local fairs that, for similar things available through the state
purchasing program, may be purchased locally at a price
equivalent to or less than that available through the state
purchasing program. As used in this subdivision, opportunity
purchases means purchases made locally, either individually or
cooperatively, at a price equal to or less than the price available
through the state purchasing program on or off state contract.

(2) The contracting standards, procedures, and rules contained
in this subdivision shall also apply with respect to any subcontract
involving an expenditure of more than one hundred thousand
dollars ($100,000). The board shall establish, as part of the bidding
procedures for general contracts, subcontracting guidelines that
implement this requirement.

(3) The board is subject to the Small Business Procurement and
Contract Act (Chapter 6.5 (commencing with Section 14835) of
Part 5.5 of Division 3 of Title 2 of the Government Code), but
exempt from the reporting requirements noted in subdivision (f)
of Section 14838.1 of the Government Code.

(4) In advertising or awarding any general contract for the
procurement of goods and services exceeding one hundred
thousand dollars ($100,000), the board and the general manager
shall require all bidders or contractors to include specific plans
to utilize subcontracts with emerging small business entities. The
subcontracting plans shall delineate the nature and extent of the
services to be utilized, and the entity or individual identified for
subcontracting, if known.

(5) It is the intent of the Legislature in enacting this section to
establish as an objective of the utmost importance the advancement
of business opportunities for emerging small business entities in
the business activities created by the association. In that regard,
the board shall have an affirmative duty to achieve the most
feasible and practicable level of participation by emerging small
business entities.

(6) With the approval of the Department of General Services,
pledge any and all revenues, moneys, accounts, accounts
receivable, contract rights, and other rights to payment of whatever
kind, pursuant to terms and conditions approved by the board.
Any issuance of bonds, contracts entered into, debts incurred,
settlements, judgments, or liens under this section or pursuant to
Chapter 5 (commencing with Section 6500) of Division 7 of Title
1 of the Government Code, shall not directly, indirectly, or
contingently obligate the state or any political subdivision of the
state to levy or to pledge any form of taxation therefor or to make
any appropriation for their payment. The bond shall contain on
its face a statement to the following effect: “Neither the full faith
and credit nor the taxing power of the State of California is pledged
to the payment of the principal of, or interest on this bond.”

(7) This section shall not apply to Article 1 (commencing with
Section 4101) of Chapter 6 of Part 3.

(c) (1) Notwithstanding any other law, an association shall
adopt a fiscal review policy as follows:

(A) An association with an annual budget exceeding five million
dollars ($5,000,000) shall conduct an annual audit by an
independent certified public accountant or certified public
accountancy firm selected by the board.

(B) An association with an annual budget of less than five
million dollars ($5,000,000) shall have its books and accounts
examined and reviewed annually and audited once every three
years by an independent certified public accountant or certified
public accountancy firm selected by the board.

(2) Notwithstanding paragraph (1), the department may require
an audit to be conducted before the times specified in
subparagraphs (A) and (B) of paragraph (1) if the department or
the state deems the audit is necessary.

end insert

begin delete SEC. 5. end delete
begin insert SEC. 7. end insert   

Section 4051.2 of the Food and Agricultural Code is
amended to read:

4051.2.  

An association shall not enter into a settlement
agreement for an amount greater than one hundred thousand dollars
($100,000) without the prior approval of the department.

begin delete SEC. 6. end delete
begin insert SEC. 8. end insert   

Section 4053 of the Food and Agricultural Code is
repealed.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 4057 of the end insert begin insert Food and Agricultural Code end insert begin insert is
amended to read: end insert

4057.  

The state is not liable for any begin insert action, obligation,
commitment, contract, or end insert premium begin delete which end delete begin insert that end insert is begin delete offered end delete begin insert offered, end insert
or award that is made, begin delete or on account of any contract which is made, end delete
by any association.

begin delete SEC. 7. end delete
begin insert SEC. 10. end insert   

Section 13332.09 of the Government Code is amended
to read:

13332.09.  

(a) A purchase order or other form of documentation
for acquisition or replacement of motor vehicles shall not be issued
against any appropriation until the Department of General Services
has investigated and established the necessity therefor.

(b) A state agency shall not acquire surplus mobile equipment
from any source for program support until the Department of
General Services has investigated and established the necessity
therefor.

(c) Notwithstanding any other law, any contract for the
acquisition of a motor vehicle or general use mobile equipment
for a state agency shall be made by or under the supervision of the
Department of General Services. Pursuant to Section 10298 of the
Public Contract Code, the Department of General Services may
collect a fee to offset the cost of the services provided.

(d) Any passenger-type motor vehicle purchased for a state
officer, except a constitutional officer, or a state employee shall
be an American-made vehicle of the light class, as defined by the
California Victim Compensation and Government Claims Board,
unless excepted by the Director of General Services on the basis
of unusual requirements, including, but not limited to, use by the
California Highway Patrol, that would justify the need for a motor
vehicle of a heavier class.

(e) General use mobile equipment having an original purchase
price of twenty-five thousand dollars ($25,000) or more shall not
be rented or leased from a nonstate source and payment therefor
shall not be made from any appropriation for the use of the
Department of Transportation, without the prior approval of the
Department of General Services after a determination that
comparable state-owned equipment is not available, unless
obtaining approval would endanger life or property, in which case
the transaction and the justification for not having sought prior
approval shall be reported immediately thereafter to the Department
of General Services.

(f) (1) The Trustees of the California State University shall, to
the greatest extent feasible, purchase vehicles using statewide
commodity contracts.

(2) The trustees shall make an interim report to the Governor
and the Legislature on January 1, 2014, and a final report on
January 1, 2015, on their motor vehicle procurement, including
all of the following:

(A) An inventory, by campus, of motor vehicles that includes
the type of vehicle, vehicle usage and fuel data consistent with the
Department of General Services fleet asset management system
and reported to the Department of General Services.

(B) The number of motor vehicles purchased during the prior
fiscal year, disaggregated by campus and type of vehicle if the
passenger vehicle or truck was purchased through statewide
commodity contracts, and the purchase price.

(C) Any change to a policy or procedure made during the prior
fiscal year related to motor vehicle procurement and contracts for
procurement and identifying any vehicle procured pursuant to the
new policy or procedure.

(D) The average time to complete procurements, average
administrative costs, reduced charges paid to the Department of
General Services, and competitive or reduced market prices
obtained for the vehicles.

(3) A report submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795.

(g) As used in this section:

(1) “General use mobile equipment” means equipment that is
listed in the Mobile Equipment Inventory of the State Equipment
Council and capable of being used by more than one state agency,
and shall not be deemed to refer to equipment having a practical
use limited only to the controlling state agency. Section 575 of the
Vehicle Code shall not have application to this section.

(2) “State agency” means a state agency, as defined pursuant
to Section 11000. The University of California is requested and
encouraged to have the Department of General Services perform
the tasks identified in this section with respect to the acquisition
or replacement of motor vehicles by the University of California.
“State agency” does not include a district agricultural association,
as defined in Section 3951 of the Food and Agricultural Code.

(h) This section shall remain in effect only until July 1, 2015,
and as of that date is repealed.

begin delete SEC. 8. end delete
begin insert SEC. 11. end insert   

Section 10320 of the Public Contract Code is repealed.

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 10321 of the end insert begin insert Public Contract Code end insert begin insert is
repealed. end insert

begin delete

10321.  

(a) (1) The Legislature finds and declares that fairs
are a valuable community resource and recognizes that local
businesses and local communities make valuable contributions to
fairs that include direct and indirect support of fair programs. The
Legislature further finds and declares that local businesses often
provide opportunity purchases to local fairs that, for similar things
available through the state purchasing program, may be purchased
locally at a price equivalent to or less than that available through
the state purchasing program.

(2) Notwithstanding any other provision of law, the Department
of Food and Agriculture shall develop criteria to be applied for
opportunity purchases that are made by district agricultural
associations, county and citrus fruit fairs, and the California
Exposition and State Fair, individually or cooperatively.

(3) As used in this subdivision, opportunity purchases means
purchases made locally, either individually or cooperatively, at a
price equal to or less than the price available through the state
purchasing program on or off state contract.

(b) (1) The Legislature finds and declares that district
agricultural associations and county and citrus fruit fairs often do
not have large, full-time staffs, and consequently the generally
applicable expenditure reporting requirements contained in the
State Administrative Manual (SAM) can represent an unreasonable
paperwork burden upon those associations and fairs.

(2) Notwithstanding any other provision of law, the Secretary
of Food and Agriculture may develop, in consultation with the
Department of General Services, an alternative expenditure
reporting procedure from the State Administrative Manual
applicable to district agricultural associations and county and citrus
fruit fairs with annual reportable expenditures of not more than
one million dollars ($1,000,000). This procedure, at a minimum,
shall maintain an audit trail and protect the ability of state auditors
to confirm the proper use of state funds.

end delete