BILL ANALYSIS Ó
AB 1455
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ASSEMBLY THIRD READING
AB
1455 (Rodriguez and Gomez)
As Amended May 18, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+--------------------|
|Local |9-0 |Maienschein, | |
|Government | |Gonzalez, Alejo, | |
| | |Chiu, Cooley, | |
| | |Gordon, Holden, | |
| | |Linder, Waldron | |
| | | | |
| | | | |
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SUMMARY: Allows the City of Ontario to issue revenue bonds for
the purpose of financing the acquisition of the Ontario
International Airport from the City of Los Angeles, and places
specified worker retention provisions on the successor agency that
acquires the Ontario Airport. Specifically, this bill:
1)Allows the City of Ontario to issue revenue bonds for the
purpose of financing the acquisition of the Ontario
International Airport from the City of Los Angeles.
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2)Specifies that the revenue bonds shall be secured solely by
future revenues and charges from that airport.
3)Requires the public agency that acquires Ontario International
Airport from the City of Los Angeles to be referred to as the
"successor agency," and requires the following conditions to
apply to the successor agency:
a) The successor agency and successor contractors shall hire
or retain incumbent workers who have been employed for the
preceding 12 months or longer by Los Angeles World Airports
or contractors at the Ontario International Airport;
b) Incumbent workers shall be retained for a period of at
least 90 days unless there is cause to terminate their
employment earlier;
c) Incumbent workers shall be employed under the terms and
conditions established by the successor agency and successor
contractors, or as required by law; and,
d) The successor agency and successor contractors shall
maintain a preferential hiring list of incumbent workers who
were not initially hired or retained.
4)Specifies that 3), above, shall not apply to any of the
following:
a) A successor contractor that is a small business that
operates with less than 10 employees;
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b) Management positions; and,
c) Specialized skill positions.
EXISTING LAW:
1)Allows local agencies to issue bonds for the acquisition,
construction, or improvement of any enterprise pursuant to the
Revenue Bond Law of 1941.
2)Defines "local agency" to mean any city, county, city and
county, or any municipal or public corporation or district,
which is authorized to acquire, construct, own, or operate any
enterprise, as defined in the Revenue Bond Law of 1941.
3)Defines "enterprise" to mean a revenue-producing improvement,
building, system, plant, works, facilities, or undertaking used
for or useful for any of the following purposes:
a) The obtaining, conserving, treating and supplying of water
for domestic use, irrigation, sanitation, industrial use,
fire protection, recreation, or any other public or private
uses;
b) The collection, treatment or disposal of garbage or refuse
matter;
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c) The collection, treatment or disposal of sewage, waste or
storm water, including drainage;
d) The providing of public parking lots, garages, or other
automotive or vehicular parking facilities, including any and
all public off-street vehicular parking facilities;
e) The providing of public transportation by means of a ferry
or ferry system;
f) The providing of public airports and facilities
appurtenant thereto;
g) The providing of harbors, including without limitation
public small boat harbors, and facilities and improvements in
connection therewith;
h) The providing of hospitals and facilities appurtenant
thereto;
i) The providing of public golf courses, and facilities and
improvements in connection therewith; and,
j) The generation, production, or transmission of electric
energy for lighting, hearing, and power for public or private
uses.
FISCAL EFFECT: None
COMMENTS:
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1)Bill Summary. This bill allows the City of Ontario to issue
revenue bonds for the purpose of financing the acquisition of
the Ontario International Airport from the City of Los Angeles,
and places specified worker retention provisions on the
successor agency that acquires Ontario Airport.
This bill is sponsored by the City of Ontario and the Ontario
International Airport Authority.
2)Background. In 1929, the City of Ontario purchased a 30-acre
tract in the southwest corner of the present airport for $12,000
and ran an airfield known as the Ontario Municipal Airport. In
1941, the City of Ontario purchased 470 acres surrounding the
airport and approved construction of new runways. In 1949,
commercial service began at Ontario International Airport and in
1951, a 10,880-square-foot terminal building was constructed.
In 1967, the Los Angeles City Department of Airports co-signed a
joint powers agreement with the City of Ontario and the airport
became part of the Los Angeles' regional airport system. Over
the years, the airport continued to purchase more land and
expand terminal space; by 1978 the passage volume was two
million. In 1985, the official transfer of title from City of
Ontario to the City of Los Angeles occurred. By 1998, a new
terminal was in construction and passage volume was over six
million. In 2005, passenger volume at the airport peaked at
seven million, but by 2010, passage volume had declined and
stabilized to about 4.8 million passengers annually traveling
through the Los Angeles/Ontario International Airport (ONT).
3)Author's Statement. According to the author, "AB 1455 was
introduced to transfer ONT from the City of Los Angeles back to
the City of Ontario. Ontario and Los Angeles have been in
discussions about transferring the sponsorship of the airport
back to Ontario. AB 1445 is the vehicle to facilitate that
transfer.
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"[ONT] is the only unconstrained commercial service airport in
Southern California. Other airports in the region are
constrained by noise, passenger caps or by facility and/or
access constraints. It has the potential to handle far more
passengers than any other airport in Southern California except
for Los Angeles International Airport (LAX). As such, its
potential growth is virtually limitless.
"In 1967, the City of Los Angeles and the City of Ontario
entered into a Joint Powers Agreement (JPA), that allowed Los
Angeles to become the airport operator. An Acquisition
Agreement was signed by the cities in 1985, and Los Angeles paid
$58,329 for the transfer.
"When the Ontario Airport was transferred to LA [Los Angeles],
the passenger traffic count was 3.7 million. In 1999, the first
year that the new terminals were open, passenger traffic was 6.6
million, peaking in 2007 to 7.2 million. Since that time,
passenger service has decreased to less than 4 million. Ontario
and Los Angeles are in negotiations to transfer the airport
back. In 2012, the City of Ontario and the County of San
Bernardino created the Ontario International Airport Authority
to receive and manage the operations of the Ontario Airport."
4)Revenue Bonds. According to the California Debt Investment and
Advisory Commission's (CDIAC) Debt Primer, revenue bonds are
long-term debt instruments retired by specific dedicated
revenues, often revenues generated by a project funded out of
bond proceeds. Revenue bonds are designed to be self-supporting
through user fees or other special earmarked receipts; the
general taxing powers of the jurisdiction are not pledged. The
debt created through the issuance of revenue bonds is to be
repaid by the earnings from the operations of a
revenue-producing enterprise (an enterprise revenue bond), from
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special taxes (a special revenue bond), or from contract leases
or rental agreements (a lease revenue bond).
5)Previous Legislation. SB 446 (Dutton) of 2012 would have
established the Ontario International Airport Authority and
would have authorized the Authority to enter into an agreement
with the City of Los Angeles to facilitate the transfer of
management and operational control of ONT from the City of Los
Angeles to the Authority. SB 446 passed out of the Senate, and
was referred to the Assembly Local Government Committee, but was
never heard.
6)Policy Considerations. The Legislature may wish to consider the
following:
a) Bond Issuance Process. This bill does not specify any
details about how the City of Ontario will issue revenue
bonds or the public process in order to do so.
b) Revenue Bond Law of 1941. The Revenue Bond Law of 1941
(Government Code Title 5, Division 2, Part 1, Chapter 6)
allows specified local agencies to issue revenue bonds for
the acquisition, construction, or improvement of any
enterprise pursuant to the procedures specified in that
Chapter. For purposes of the Revenue Bond Law, local agency
is defined as a "city, county, city and county, or any
municipal or public corporation or district which is
authorized to acquire, construct, own, or operate any
'enterprise,'" as defined). "Enterprise" is defined to mean
a revenue-producing improvement, building, system, plant,
works, facilities, or undertaking used for or useful for
specified purposes, including "the providing of public
airports and facilities appurtenant thereto."
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The Legislature may wish to consider whether the existing
Revenue Bond Law of 1941 would allow the City of Ontario to
issue bonds without the need for legislation.
c) Local Fight. The transfer of the Ontario Airport is an
issue that has yet to be solved locally, although discussions
are ongoing. The Legislature may wish to ask the author for
an update on where those negotiations stand, and whether a
better approach might be to let those negotiations continue,
and if legislation is necessary in the future to implement an
agreement, getting the Legislature involved then, rather than
the Legislature picking winners and losers in what is a
local, regional fight.
7)Arguments in Support. Supporters argue that this bill would
establish local control for Ontario International Airport and
restore one of Southern California's most important economic and
jobs engines.
8)Arguments in Opposition. None on file.
Analysis Prepared by:
Debbie Michel / L. GOV. / (916) 319-3958 FN:
0000441
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