SB 624: Horse racing: state-designated fairs: allocation of revenues: gross receipts for sales and use tax.

Existing law requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports gross receipts for sales and use tax purposes to segregate the gross receipts of the seller and the sales price of the property on a line or a separate form when the place of sale in this state or for use in this state is on or within the real property of a state-designated fair, as defined, or any real property of a state-designated fair that is leased to another party. Existing law requires, on or before November 1 of each year, the CDTFA to report to the Department of Finance the amount of the total gross receipts segregated on these tax returns for the prior fiscal year, and that ³/₄ of 1% of the total gross receipts be included in the next annual Governors Budget for use by the Department of Food and Agriculture for allocation to fairs and that those funds be transferred by the Controller to the Fair and Exposition Fund, which is continuously appropriated, as prescribed. Existing law provides that certain revenues deposited into the Fair and Exposition Fund are appropriated without regard to fiscal years for allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, as specified.

This bill would increase the amount of the total gross receipts required to be included in the next annual Governors Budget for use by the Department of Food and Agriculture and transferred to the Fair and Exposition Fund, as specified, from ³/₄ of 1% to 3.5%. From the funds subject to allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, which the bill would increase by adding this 3.5% gross receipts transfer, the bill would require, each fiscal year, the sum of $2,500,000, or an amount equal to 5% of the fund, whichever is greater, to be paid to the department for purposes of providing administrative services to fairs, as specified. The bill would also require, each fiscal year, from the amounts available in the Fair and Exposition Fund after the payment made to the department, the sum of $500,000 to be paid to the nonprofit organization representing all fairs in the network of California fairs for purposes of providing services to fairs, as specified. The bill would make other nonsubstantive changes regarding appropriations to the department for fairs.

This bill would require the Secretary of Food and Agriculture, by May 15 of each year, to prepare an annual expenditure plan for funds from the Fair and Exposition Fund for review and approval by the Joint Committee on Fairs Allocation and Classification, as provided.

By increasing the amounts to be deposited into the Fair and Exposition Fund, which is continuously appropriated, and by appropriating these amounts for new purposes, the bill would make an appropriation.