BILL ANALYSIS Ó
AB 359
Page 1
ASSEMBLY THIRD READING
AB 359 (Holden)
As Amended May 13, 2013
Majority vote
JUDICIARY 10-0
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|Ayes:|Wieckowski, Wagner, | | |
| |Alejo, Chau, Dickinson, | | |
| |Garcia, Gorell, | | |
| |Maienschein, Muratsuchi, | | |
| |Stone | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Clarifies and limits existing law regarding independent
audits, paid for by airports, to determine reasonable costs of
customer facility charges (CFC) used to finance, design, construct,
and operate consolidated airport rental car facilities.
Specifically, this bill :
1)Clarifies that an airport does not need to have an additional and
separate audit regarding the customer facility charge fees.
2)Limits the existing requirement to conduct periodic audits at
three-year intervals.
FISCAL EFFECT : None
COMMENTS : The author explains the bill as follows: "AB 359
streamlines the Airport Rental Car Facility charge audit process by
permitting California's airports, many of which are financed and
operated by local governments, to submit to the Legislature the same
facility information contained in mandatory disclosures currently
required by other regulatory agencies. This bill will remove the
financial burden of duplicative audits while maintaining all
existing consumer protections enacted by the Legislature."
Background information provided by the author states:
In 2010, the Legislature passed SB 1192 (Oropeza)
authorizing California airports to increase airport
customer facility charges in order to pay for expanded on
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and off site consolidated rental car facilities and
common-use transportation systems between terminals and the
facilities. To prevent abuses of the new fee authority,
the Legislature placed numerous conditions on the charges.
One such condition, aimed at safeguarding the
reasonableness of the fees collected, required any airport
increasing consumer facility charges to conduct an
independent audit and have the results verified by the
State Controller's Office. Once the audit was verified,
the information is to be shared with the Judiciary and the
Transportation Committees of each legislative house.
Burbank, Fresno and San Jose airports were the first
airports subject to the audit requirement. The independent
audit cost Burbank airport approximately $80 thousand
dollars in addition to $45,000 required to reimburse the
State Controller for its work.
After an initial review of the airports' independent
audits, the State Controller's Office better equipped
focusing on state funding projects and requested they be
removed from the audit process. SB 1006, a 2012 budget
trailer bill, removed the State Controller from the audit
process. As a result of SB 1006, airports seeking to enact
customer facility charges must now submit an independent
audit to the Judiciary and Transportation legislative
committees of each house.
Currently, various regulatory agencies at the city and
county level require all airports to conduct annual
financial and operations audits. The information contained
in these audits is identical to the information required to
be submitted to the Legislature pursuant to Civil Code
section 1936.
In recent years, many airports have constructed rental car
facilities, often in consolidated facilities that house all car
rental companies in one location. These facilities may be served by
common-use transportation systems, including bus shuttle systems,
which transport rental car customers to and from terminals and the
consolidated rental car facility. These facilities and systems are
made possible by rental car user fees for customers who choose to
rent from an on-airport rental car company. The authority to
collect these customer facility fees began in 1999 when the
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Legislature passed and the Governor signed SB 1228 (Vasconcellos),
Chapter 760, which permitted San Jose International Airport to
collect a customer facility charge of $10.15 to finance and
construct a consolidated rental car facility and common-use
transportation systems, subject to certain conditions. San
Francisco and San Diego were also permitted similar statutory
authority.
SB 1192 (Oropeza), Chapter 642, Statutes of 2010 allowed airports to
collect a CFC calculated on an alternative basis - a varying amount
per day during each day of the rental period, rather than the $10
rate per-contract - and allowed the CFC to be increased at the
covered airports. SB 1192 also expanded the uses of CFC revenue to
allow for the acquisition of vehicles to be used for the
transportation of customers in a common-use transportation system,
and to allow for terminal modifications.
In order to ensure that this new fee authority was necessary, and
that the fee level selected by each airport was appropriate, SB 1192
required the higher CFC to be collected after a review and approval
process, beginning with a public hearing at the airport, in
recognition of the discretion that SB 1192 gave to each airport to
set the amount of the CFC, and to use it for new and ongoing
purposes. SB 1192 also provided that the audits were to be
conducted at specific intervals, and that the State Controller was
to review the audits. Because the chosen fee level is required to
be set at a reasonable rate, SB 1192 established criteria for that
determination.
The Controller's review of the audits was eliminated in a budget
trailer bill last year, without consideration by the Assembly
Judiciary Committee or any policy committee. This bill would
restore the reasonableness standards that were inadvertently deleted
in the process of removing the Controller's review.
This bill would address the airports' concern about audit costs by
clarifying that the required audit is to be done by an independent
auditor but need not duplicate or be done in addition to any other
audit the airports may have done for another purpose. Moreover,
recent amendments would delete the existing obligation to conduct an
audit every three years, except to the extent there are ongoing
expenditures regarding the operation of a transportation system.
These savings are believed to be significant.
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Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0000514