Existing law regulates the acquisition by the state of goods or services by contract. A provision of that existing law prohibits an officer or employee in the state civil service or other appointed state official, for compensation or with a personal financial interest, to engage in any employment, activity, or enterprise that is funded, or sponsored and funded, by any state agency or department through or by a state contract, unless required to do so as a condition of the officers or employees regular state employment.

This bill would exempt an employee or state officer, not including a member of the board of directors, of a district agricultural association from that conflict of interest prohibition for purposes of contracting with another district agricultural association, subject to the approval of the board of directors of the association of which the person is an employee or state officer.

Existing law regulates the acquisition by the state of goods or services by contract. A provision of that existing law prohibits an officer or employee in the state civil service or other appointed state official, for compensation or with a personal financial interest, to engage in any employment, activity, or enterprise that is funded, or sponsored and funded, by any state agency or department through or by a state contract, unless required to do so as a condition of the officers or employees regular state employment.

This bill would exempt an employee or state officer, not including a member of the board of directors, of a district agricultural association from that conflict of interest prohibition for purposes of contracting with another district agricultural association, subject to the approval of the board of directors of the association of which the person is an employee or state officer.

Existing law regulates the acquisition by the state of goods or services by contract. A provision of that existing law prohibits an officer or employee in the state civil service or other appointed state official, for compensation or with a personal financial interest, to engage in any employment, activity, or enterprise that is funded, or sponsored and funded, by any state agency or department through or by a state contract, unless required to do so as a condition of the officers or employees regular state employment.

This bill would exempt an employee or state officer, not including a member of the board of directors, of a district agricultural association from that conflict of interest prohibition for purposes of contracting with another district agricultural association, subject to the approval of the board of directors of the association of which the person is an employee. employee or state officer.

Existing law provides that specified contracts entered into by any state agency for goods, services, or other specified activities, whether awarded through competitive bidding or not, are void unless and until approved by the Department of General Services, and requires denial of approval if the contract does not meet the required specifications of the bidding process. Under existing law, certain transactions, contracts, and persons are exempt from that law.

This bill would additionally exempt an officer or employee of a district agricultural association, except as otherwise provided in existing law and subject to the approval of the board of directors of the association.

 CONSENT  

Bill No: AB 2396

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 10-0, 6/12/18

AYES: Dodd, Wilk, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Portantino, Vidak

NO VOTE RECORDED: Bradford, Lara

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 73-0, 5/17/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Western Fairs Association

DIGEST: This bill exempts an employee or state officer of a district agricultural association (DAA) from a current conflict of interest prohibition for purposes of contracting with another DAA if approved by the DAA Board of Directors.

ANALYSIS:

Existing law:

1. Regulates the acquisition by the state of goods and services by contract.
2. Prohibits an officer or employee in the state civil service or other appointed state official, to engage in any employment, activity that is funded, or sponsored by any state agency through or by a state contract, unless required to do so as a condition of their regular state employment.
3. Governs fairs and expositions in this state, including the California Exposition and State Fair, county and district fairs, and citrus fruit fairs.

This bill:

1. Allows a state employee or state officer of a DAA to contract with or become an employee of another DAA if the board of directors of the employee’s original DAA approves the arrangement.
2. Excludes DAA board members from this exemption.

Comments

Purpose of the bill. According to the author’s office, “this measure allows employees to work at multiple fairs during fair time, creating a valuable way in which to use limited resources. We love our fairs, and it is important that they have this opportunity to exempt employees and allow them to work at multiple [fairs] in a season.”

California’s network of fairs. California fairs have been in existence since 1854. The network of California fairs includes 77 fair organizations divided into four categories: (1) 52 district agricultural associations which are state government entities governed by a board of directors appointed by the Governor; (2) 22 county fairs which are county government or not-for-profit organizations; (3) two citrus fruit fairs (Cloverdale and San Bernardino Orange Show) which are not-for-profit organizations; and, (4) the California Exposition and State Fair (Cal Expo), a state entity. California’s 77 fairs are located throughout the state and host fairs from early spring to the fall of each year.

The California Department of Food and Agriculture is responsible for the oversight of California's agricultural industry, including the network of California fairs. The Division of Fairs and Expositions provides fiscal and policy oversight of the network of California fairs and ensures the best use of available funding and services.

Related/Prior Legislation

SB 368 (McGuire, Chapter 808, Statutes of 2017) provided that any unallocated balance of revenues, derived from specified deposits into the Fair and Exposition Fund and other funding appropriated by the Legislature or otherwise designated for fairs, is to be continuously appropriated for allocation by the Secretary of the California Department of Food and Agriculture for capital outlay to fairs.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 7/2/18)

Western Fairs Association (source)

OPPOSITION: (Verified 7/2/18)

None received

ARGUMENTS IN SUPPORT: According to the Western Fairs Association, “the fair industry is a small community that requires special expertise and knowledge. Over the past couple years, retirements among DAA Executive Directors have created the opportunity for a new group of staff to provide leadership to our industry. Unfortunately, some of these new leaders come from within the industry, which can create conflicts under current statute. AB 2396 addresses this issue by allowing an employee of a DAA to have an interest in a company that provides service to the industry if the Board of Directors authorizes it.”

ASSEMBLY FLOOR: 73-0, 5/17/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Cristina Garcia, Melendez, Muratsuchi, Santiago, Steinorth

Prepared by:

7/3/18 15:53:10

**** END ****

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2017 - 2018 Regular

Bill No: 2396 Hearing Date: 6/12/2018

SUBJECT: Public contracting: conflicts of interest: exemption

DIGEST: This bill exempts an employee or state officer of a district agricultural association (DAA) from a current conflict of interest prohibition for purposes of contracting with another DAA if approved by the DAA Board of Directors.

ANALYSIS:

Existing law:

1. Regulates the acquisition by the state of goods and services by contract.
2. Prohibits an officer or employee in the state civil service or other appointed state official, to engage in any employment, activity that is funded, or sponsored by any state agency through or by a state contract, unless required to do so as a condition of their regular state employment.
3. Governs fairs and expositions in this state, including the California Exposition and State Fair, county and district fairs, and citrus fruit fairs.

This bill:

1. Allows a state employee or state officer of a DAA to contract with or become an employee of another DAA if the board of directors of the employee’s original DAA approves the arrangement.
2. Excludes DAA board members from this exemption.

Background

Purpose of the bill. According to the author’s office, “this measure allows employees to work at multiple fairs during fair time, creating a valuable way in which to use limited resources. We love our fairs, and it is important that they have this opportunity to exempt employees and allow them to work at multiple [fairs] in a season.”

California’s network of fairs. California fairs have been in existence since 1854. The network of California fairs includes 77 fair organizations divided into four categories: (1) 52 district agricultural associations which are state government entities governed by a board of directors appointed by the Governor; (2) 22 county fairs which are county government or not-for-profit organizations; (3) 2 citrus fruit fairs (Cloverdale and San Bernardino Orange Show) which are not-for-profit organizations; and, (4) the California Exposition and State Fair (Cal Expo), a state entity. California’s 77 fairs are located throughout the state and host fairs from early spring to the fall of each year.

The California Department of Food and Agriculture is responsible for the oversight of California's agricultural industry, including the network of California fairs. The Division of Fairs and Expositions provides fiscal and policy oversight of the network of California fairs and ensures the best use of available funding and services.

Prior/Related Legislation

SB 368 (McGuire, Chapter 808, Statutes of 2017) provided that any unallocated balance of revenues, derived from specified deposits into the Fair and Exposition Fund and other funding appropriated by the Legislature or otherwise designated for fairs, is to be continuously appropriated for allocation by the Secretary of the California Department of Food and Agriculture for capital outlay to fairs.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Western Fairs Association (Source)

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the Western Fairs Association, “the fair industry is a small community that requires special expertise and knowledge. Over the past couple years, retirements among DAA Executive Directors have created the opportunity for a new group of staff to provide leadership to our industry. Unfortunately, some of these new leaders come from within the industry, which can create conflicts under current statute. AB 2396 addresses this issue by allowing an employee of a DAA to have an interest in a company that provides service to the industry if the Board of Directors authorizes it.”

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2396

Author:(Bigelow) – As Amended Ver:April 18, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill exempts an employee or state officer of a district agricultural association (DAA) from conflict-of-interest requirements for the purpose of contracting or becoming an employee of another DAA. The bill requires the employee’s original DAA board of directors to approve the arrangement and excludes DAA board members from this exemption.

FISCAL EFFECT:

Negligible state cost.

COMMENTS:

1. Purpose. This bill seeks to provide DAAs needed flexibility during fair times. The author explains, "This measure importantly allows employees and state officers to work at multiple fairs during fair time, creating a valuable way in which to use limited resources."
2. Background. Existing law divides the state into agricultural districts and provides for the management of these districts by district agricultural associations. DAAs are state government entities that are governed by nine-member gubernatorial appointed boards of directors (fair boards). There are 54 statutory DAAs, of which 52 are active and 41 operate on state-owned lands. They hold various activities on their sites, such as fairs and fundraising and commercial events. DAAs are distinct from the California Exposition and State Fair (Cal Expo), which is a state agency.

DAAs in some areas provide the only event space for the local community. DAA budgets run from several hundred thousand dollars to over 10 million dollars. Only a few DAAs are self-sustaining, most are not. Additionally, almost all have deferred maintenance of buildings or grounds, or both.

DAAs were historically subsidized by the state through a portion of horse racing revenues until 2009, when funding was switched to the state general fund (GF) in the amount of $32 million. In 2011, the GF dollars were deleted. Since then, DAAs have been operating on their reserves and own revenues. As a result of the withdrawal of state funds, DAAs have been given some flexibility on purchasing and contracting rules.

Many small DAAs rely on experts from neighboring DAAs when they are conducting fairs. However, current law related to conflicts of interest prohibits an officer or employee in state civil service or appointed state official from engaging, for pay or with a personal financial interest, in employment or a contract with another state agency or department. This prohibition precludes DAA employees and state officers (DAA board members, managers, secretaries, and treasurers) from contracting with other DAAs during fair time.

This bill exempts a DAA employee or state officer, except a board member, from this conflict-of-interest prohibition for purposes of contracting with another DAA, subject to their board’s approval.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW

Susan Talamantes Eggman, Chair

ABPCA Bill Id:AB 2396 (

Author:Bigelow) – As Amended Ver:April 18, 2018

SUBJECT: Public contracting: conflicts of interest: exemption

SUMMARY: Exempts an employee or state officer of a district agricultural association (DIA) from conflict of interest requirements for the purpose of contracting or becoming an employee of another DIA. Specifically, this bill:

1. Allows a state employee or state officer of a DIA to contract with or become an employee of another DIA if the board of director's (board) of the employee's original DIA approves the arrangement.
2. Excludes DIA board members, who are considered state officers, from this exemption.

EXISTING LAW:

1. Establishes DIAs in state government, which are allowed to hold fairs and operate cultural facilities of public interest.
2. Generally prohibits a paid officer, employee, or official of a state agency from contracting with or working for another state entity.

FISCAL EFFECT: Unknown

COMMENTS: This bill allows an employee or state officer working for one DIA to contract with or work for another DIA as long as the arrangement is approved by the original DIA's board. State officers, as specified in this bill, include DIAs' secretaries, managers, and treasurers.

According to the author, this bill will provide DIAs needed flexibility during fair times. Specifically, the author explains that many small DIAs rely on experts from neighboring DIAs when they are conducting fairs. However, current law related to conflict of interest does not allow a DIA employee or state officer to contract with or work for another DIA.

The author explains, "This measure importantly allows employees and state officers to work at multiple fairs during fair time, creating a valuable way in which to use limited resources."

REGISTERED SUPPORT / OPPOSITION:

Support

Western Fairs Association (sponsor)

Opposition

None on file

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600