Senate Standing Committee on Agriculture

Senate Committee on Agriculture will begin in thirty seconds. Good morning. The Senate Committee on Agriculture will come to order. Believe we have a quorum. Please call the roll.

[Roll Call]

We do have a quorum. So welcome this morning, this rainy morning, on the day of agriculture day at the Capitol. We have a very brief agenda today. We had two items. One item has been pulled and that is item number 2 SB1410 by Senator Alvarado-Gil.

So that leaves us file item number one SB 1223 by Senator Padilla. Welcome, and the floor is yours.

Good morning, Madam Chair and Members. And Madam Chair, many happy returns. Pleased to present and be joined with by my witness this morning.

SB 1223 would require state and county fairs to use competitive bidding standards in the awarding of contracts and prohibit sole source contracting. A recent investigation by the Los Angeles Times found widespread corruption in California's fairs.

It's found that over 1,000,000 in public funds were stolen and state auditors had accused officials, had accused officials of dozens of other fairs of misspending equal sums. In order to address some of the corruption, lawsuits were filed by a fair midway operator against

the San Diego and Orange County fairs. It was found in the lawsuit against the San Diego County fair that fair officials had changed the scores of a 2021 contract competition to favor one bidder over another under the direction of the Fairgrounds CEO.

The lawsuit against the Orange County Fair revealed that the public contracts code competitive bidding requirements do not apply to all fair contracts, allowing certain bids to be tailored or written for a single entity or petitioner.

Public contract code was written to guard against favoritism and promote fair competition in state contracts.

Competitive bidding requirements are an important tool for transparency and accountability by promoting fair competition. These bidding requirements also ensure that the state is securing the best service at the best price.

Fairs are a public resource that are enjoyed by many throughout the state, and we must close this loophole to help combat corruption that is plaguing a cherished public tradition.

I'm pleased to have, with me today Mr. John Moot, Senior Counsel at Freeman, Mathis and Gary as my witness.

Welcome, sir. Thank you. Floor is yours.

Madam Chair, Members of the committee, there are 54 district agricultural associations that hold fairs and exposition that are arguably not subject to the provisions of the California public contract code.

I was the attorney for tally amusements in the two lawsuits that are referenced in your committee report. In the first, the trial court held that the public contract code did apply to the twenty second District Agricultural Association.

And in the course of that lawsuit, it was revealed the CEO of the fairgrounds, not once, but twice changed the scores to award the contract to the favored bidder.

The way these contracts are rigged is to write them write the RFPs so that only one company in the whole United States could beat the minimum experience and qualifications.

However, as a result of this alarming testimony and an injunction issued by the trial court, the case was settled, Talley was reinstated in the fair, and Agri District paid our client $500,000. However, what happened to the 38 Agricultural District was very different.

They wrote the same RFP, again, so only one company, the favorite company, the same one in San Diego, could meet the minimum experience and qualifications.

However, this time, the trial court ruled that the food and agricultural code was written in such a way that it did not apply the public contract code. And as a result, the trial court dismissed the lawsuit.

That carnival operator has now had for twenty years, an additional ten years, an $80,000,000 contract that has never gone through the competitive bidding process.

Now the appellate court in a published opinion upheld the the trial court's dismissal, but stated in the footnote and I quote, the if the legislature did not intended a different result, quote, we invite them to revisit and clarify the language.

And that's exactly what this bill does. Parenthetically, we filed a petition with the California Supreme Court. And upon reviewing the petition while they did not grant review, they did order the published opinion depublished.

So I think even the California Supreme Court tacitly agreed that, yes, the Food and Agricultural Code cannot be read so that you can issue RFPs so only one bidder can meet the qualifications. So I thank Senator Patilla.

People don't realize how lucrative these contracts really are. I mean, the one in Orange County for five years is worth $80,000,000. I mean, this is a major generating source for revenue for property owned by the state it absolutely should be subject to the competitive bidding process.

Thank you very much. Testimony in support. We're gonna do the #MeToo's next. If you would like to support the bill, now is your time to come up to the mic and give your name and your affiliation and that you support the bill, and then we'll take the opposition.

Anybody here like to give #MeToo testimony? #MeToo testimony. Very good. Is there any, witness in opposition that would like to testify?

Seeing none, is there any, #MeToo opposition that would like to, be placed on the record? Seeing none, we'll bring the committee back to the committee for questions, concerns, comments, motions. Move the bill. You may conclude, sir.

Thank you very much. Madam Chair, I'd like to thank my expert witness for his tenacity and for flagging this issue for not just me, but for the legislature as a whole. Obviously, we hope this is a productive outcome and respectfully ask for an Aye vote.

Thank you very much and I also wanna take a minute to thank you very much. It was an excellent explanation for quite frankly government run amok, if you will.

I think anybody in their right mind would understand that a agricultural district is part of the state and that they have to follow state rules and procedure. And if it was in the AG code and not explicit, it's an error.

And so I do appreciate you bringing this forward and you as well, Senator. So a motion's been made. Please call the roll. Yes. We did. We did. And you're you're noted as here now with your vote. Thank you.

Perfect. So SB 1223, motion due passed to appropriations committee. [Roll Call]

That bill has four votes. We're gonna put it on call for the absent member. Thank you very much for being here today. Appreciate your testimony. The committee on agriculture will recess for five minutes.

The Senate committee on agriculture will come to order again. We are we have concluded our agenda, and we are closed. Adjourned. Oh. Oh, that's right.

Well, let's go back on on the record again. Never mind. We'll go back to SB 1223 by Senator Padilla. Please call the absent Member.

[Roll Call]

That concludes our roll call for today. That bill is out four to one no. Four to zero. And, that concludes the business of the committee on the Senate Committee on Agriculture. Have a good day, everybody.