BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1192|
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UNFINISHED BUSINESS
Bill No: SB 1192
Author: Oropeza (D)
Amended: 8/30/10
Vote: 21
SENATE JUDICIARY COMMITTEE : 4-0, 5/4/10
AYES: Corbett, Harman, Hancock, Leno
NO VOTE RECORDED: Walters
SENATE LOCAL GOVERNMENT COMMITTEE : 5-0, 5/5/10
AYES: Cox, Aanestad, Kehoe, DeSaulnier, Price
SENATE APPROPRIATIONS COMMITTEE : 7-2, 5/27/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Denham, Wyland
NO VOTE RECORDED: Cox, Walters
SENATE FLOOR : 32-1, 6/3/10
AYES: Alquist, Ashburn, Calderon, Cedillo, Cogdill,
Corbett, Correa, DeSaulnier, Ducheny, Dutton, Florez,
Hancock, Huff, Kehoe, Leno, Liu, Lowenthal, Negrete
McLeod, Oropeza, Padilla, Pavley, Price, Romero, Runner,
Simitian, Steinberg, Strickland, Walters, Wolk, Wright,
Wyland, Yee
NOES: Denham
NO VOTE RECORDED: Aanestad, Cox, Harman, Hollingsworth,
Wiggins, Vacancy, Vacancy
ASSEMBLY FLOOR : 49-27, 8/30/10 - See last page for vote
SUBJECT : Airports: rental car facility fees
CONTINUED
SB 1192
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SOURCE : City of Los Angeles
DIGEST : This bill expands the definition of customer
facility charge to include a fee that is required by an
airport to be collected for the purpose of financing,
designing, constructing, and operating any common-use
transportation system, as specified, and for acquiring
vehicles for use in that system. This bill authorizes an
alternative fee following a hearing and finding by the
airport, as provided, that the customer facility charge
will not generate sufficient revenue to finance and operate
the consolidated rental car facility and common-use
transportation system. The bill provides for the
collection of the alternative fee on a per-day basis, as
specified. The bill, requires any airport seeking to
collect an alternative customer facility charge to provide
reports on an annual basis to the Senate and Assembly
Committees on Judiciary detailing the total amount of the
customer facility charge collected, how the funds are being
spent, the amount of and reason for any changes in the
airport's budget or financial needs, and whether certain
airport concession fees have increased since the prior
report, if any. The bill also requires the airport to
complete a specified independent audit prior to the initial
collection of the customer facility charge, prior to any
increase, as specified, and every three years after initial
collection and any increase, as provided. The bill
requires the Controller to review those audits and
independently examine and substantiate the necessity for
and the amount of the customer facility charge. The bill
requires the individual airports being audited to reimburse
the Controller's costs. The bill also requires the
Controller to report to the Legislature on his or her
conclusions, as provided. This bill incorporates
additional changes to Section 1936 of the Civil Code, as
proposed by AB 2059 (C. Calderon), to be operative only if
AB 2059 and this bill are both enacted; each bill amends
Section 1936 of the Civil Code, and this bill is enacted
after AB 2059.
Assembly Amendments (1) amend the definition of "customer
facility charge" and authorizes an alternative fee
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following a hearing by the airport; (2) delete the
reference to the Bob Hope Airport, Fresno Yosemite
International Airport and the San Diego International
Airport and now include any airport seeking to collect an
alternative customer facility charge; (3) add
double-jointing language with AB 2059 (C. Calderon)
relative to Section 1936 of the Civil Code; (4) improve the
oversight process by requiring airports to provide
additional information regarding the uses and alternatives
for the funds, clarify the obligations of the State
Controller; (5) delete the $550,000 appropriation and
instead require the individual airports to reimburse the
Controller's cost incurred by being audited; and (6) delete
the 27-vote requirement.
ANALYSIS : Existing law governs contracts between rental
car companies and their customers. Existing law authorizes
a company that rents passenger vehicles to the public to
collect a customer facility charge, which means a fee that
is required by an airport to be collected for certain
purposes, if specified circumstances apply, including, but
not limited to, the collection of the fee is required by an
airport operated by a city, a county, a city and county, a
joint powers district, or a special district, the fee is
calculated on a per contract basis, the fee is a user fee
and not a tax, as specified, and the fee is $10 per
contract, except as specified.
Existing law provides that a statute that imposes a
requirement that a state agency submit a periodic report to
the Legislature is inoperative on a date four years after
the date the first report is due.
This bill provides for a new method of calculating and
controlling consumer fees for covered airport consolidated
rental car facilities, and new uses for those fees.
Specifically, this bill:
1.Provides an alternative method for calculating a customer
facility charge (CFC) based on the number of days a
vehicle is rented, up to a maximum of five days, rather
than a flat rate per contract, if an airport subject to
the bill demonstrates the need to do so.
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2.Requires that any airport wishing to exercise this
authority must do so before January 1, 2018.
3.Expands the purposes to which a CFC can be used to
include a fee to finance, design, and construct terminal
modifications to accommodate and provide customer access
to common-use transportation systems, as well as to
acquire vehicles for a common-use transportation system.
4.Requires additional auditing and reports to demonstrate
the need for and purposes to which CFCs are put,
including new oversight by the State Controller.
Background
In recent years, many airports have located rental car
facilities off-site, often in consolidated facilities that
house all car rental companies in one location. Common-use
transportation systems, including bus shuttle systems,
transport rental car customers to and from terminals and
the consolidated rental car facility.
In 1999, the Legislature passed and the governor signed SB
1228 (Vasconcellos), Chapter 760, Statutes of 1999, which
permits San Jose International Airport to collect a
customer facility charge of $10.15 to finance and construct
these consolidated rental car facilities and common-use
transportation systems, subject to certain conditions. San
Francisco and San Diego were also permitted similar
statutory authority. AB 491 (Frommer), Chapter 661,
Statutes of 2001, authorizes other public airports to
collect a $10 fee per contract to finance, design, and
construct consolidated rental car facilities and common-use
transportation systems. In 2007, SB 641 (Corbett), Chapter
44, Statutes of 2007, repeals the special authorization for
San Jose International Airport and instead applied the more
general provisions enacted by AB 491 to San Jose
International Airport, thus permitting it to collect a $10
per contract customer facility charge (CFC).
In Los Angeles, the Los Angeles International Airport (LAX)
plans to build a consolidated rental car facility. A
recent Los Angeles Times article noted the following about
the project:
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Los Angeles International Airport officials are
drafting plans to build a terminal that will house
many of the area's rental car companies, providing
space for 33,000 vehicles while helping untangle the
airport's notorious congestion and cutting pollution.
The terminal, which could cost as much as $800
million, is also expected to make it easier for
people to find their rental agencies or switch from
one to another if the line is too long or it doesn't
have the right car. LAX has collected $47 million
for the project since 2007 by charging a flat $10 fee
on rentals from the 10 companies whose vans circle
the airport looking for customers.
But the fee is not bringing in enough money, said
Mark Adams, chief government affairs representative
for Los Angeles World Airports, which operates LAX.
In order to raise more funds, the airport is hoping
to boost the surcharge through a daily fee rather
than the current flat fee on rentals. The airport is
still several years from beginning construction of
the terminal.
. . . Although airport traffic is down substantially
since 9/11, rental agency vans make about 800,000
trips a year into the main airport, according to
airport statistics, often with just one or two
passengers. With a consolidated rental facility,
buses would shuttle passengers between it and airline
terminals, dropping the number of trips to 437,000
annually. Trips would be cut even further if a
planned light-rail system with stops at the rental
car terminal is built. Adams said the rental
terminal is "considered the most significant air
quality mitigation" effort in the airport's master
plan. ("LAX plans a consolidated car rental
facility," Los Angeles Times, February 26, 2010.)
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/30/10)
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City of Los Angeles (source)
Alliance for a Regional Solution to Airport Congestion
Bob Hope International Airport
California Airports Council
California Chamber of Commerce
Fresno-Yosemite International Airport
Inglewood-Airport Area Chamber of Commerce
Los Angeles Chamber of Commerce
San Francisco International Airport
ARGUMENTS IN SUPPORT : The author's office states,
"Construction of consolidated rental-car outlets at
California commercial airports is now a fairly common
practice. These centralized rental locations aggregate the
operations of the on-airport rental car companies into one
large site and house rental offices such as service centers
and ready/return parking lots. Consolidated rental-car
outlets are a vital step toward alleviating airport traffic
congestion and air pollution. Consumer choice at many
airports is also limited or non-existent by the many
separate rental-car outlets and use of dedicated shuttles,
vans and buses.
"Airports currently use Consumer Facility Charges (CFCs) to
finance the insurance of long-term debt to pay for the
design, construction and operations of these rental offices
and the operation of the common-use transportation systems
at airport terminals. With limited exceptions, existing
state statute passed in 2001 only allows collection of the
CFC at a fixed rate of $10 per rental-car transaction.
This one-size-fits-all approach is failing to provide
sufficient revenues to: 1) issue or service existing bonds
to finance the construction of these car-rental offices; 2)
cover ongoing operational costs of the offices and their
common-use transportation systems. The current transaction
fee does not offer an airport authority the flexibility to
tailor its fee to local market conditions. In addition,
when new car-rental outlets planned in California airports
cannot be sufficiently funded under the current $10 per
contract fee without airport subsidies, other vital airport
services are effected."
This bill is sponsored by the City of Los Angeles which
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argues that the bill would "provide California's airports
with the funding mechanism they need to construct essential
consolidated rental car facilities. These facilities
reduce traffic congestion and air pollution and increase
consumer choice. It is for these reasons our city is
proposing to construct such a facility at Los Angeles
International Airport (LAX). However our state's airports
are currently locked into a fixed $10 per contract Customer
Facility Charge (CFC) first set in 1999 that is often
insufficient to fully fund construction of these facilities
or to pay for the ones that have already been built."
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Fuentes, Furutani, Galgiani, Gatto, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jones, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Skinner,
Solorio, Torlakson, Torres, Torrico, Yamada, John A.
Perez
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Conway, Cook, DeVore, Fletcher, Fuller, Gaines, Garrick,
Gilmore, Hagman, Harkey, Jeffries, Knight, Logue, Miller,
Nestande, Niello, Nielsen, Norby, Silva, Smyth, Audra
Strickland, Tran, Villines
NO VOTE RECORDED: Caballero, Swanson, Vacancy, Vacancy
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Fuentes, Furutani, Galgiani, Gatto, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jones, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Skinner,
Solorio, Torlakson, Torres, Torrico, Yamada, John A.
Perez
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Conway, Cook, DeVore, Fletcher, Fuller, Gaines, Garrick,
Gilmore, Hagman, Harkey, Jeffries, Knight, Logue, Miller,
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Nestande, Niello, Nielsen, Norby, Silva, Smyth, Audra
Strickland, Tran, Villines
NO VOTE RECORDED: Caballero, Swanson, Vacancy, Vacancy
RJG:do 8/31/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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