BILL ANALYSIS Ó
AB 359
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 359 (Holden)
As Amended August 30, 2013
Majority vote
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|ASSEMBLY: |69-0 |(May 24, 2013) |SENATE: |38-0 |(September 9, |
| | | | | |2013) |
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Original Committee Reference: JUD.
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 and further specifies the contents of
such audits.
The Senate amendments clarify that the audit required prior to
any increase in the CFC shall be updated with respect to the
information provided in the initial collection audit that
established the CFC and any subsequent increases. The Senate
amendments further clarify the requirements regarding periodic
audits of common-use transportation systems.
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."
AB 359
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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 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
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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 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
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another purpose and may update previously provided information,
where appropriate. Moreover, the audit requirements would be
further specified with respect to expenditures regarding the
operation of transportation systems.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0002706