BILL ANALYSIS Ó AB 2280 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2280 (Ridley-Thomas) As Amended August 15, 2016 2/3 vote. Urgency -------------------------------------------------------------------- |ASSEMBLY: | | (June 2, |SENATE: |38-0 |(August 30, | | | |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (vote not relevant) Original Committee Reference: H.&C.D. SUMMARY: Authorizes the Los Angeles International Airport to require rental companies to charge customer facility fees for specified purposes, subject to an independent audit and time limitation. The Senate amendments delete the Assembly version of this bill, and instead: 1)Authorize the Los Angeles International Airport to impose a customer facility charge for the purpose of financing, constructing, designing, or otherwise improving consolidated airport vehicle rental facilities and common-use transportation systems that move passengers between airport AB 2280 Page 2 terminals and those consolidated vehicle rental facilities, and to acquire vehicles for use in that system. Specify that this authority shall become inoperative when bonds, capital contributions, availability payment contracts, lease agreements, or other forms for financing are paid or reimbursed, and that the maximum term for financing shall not exceed 35 years. 2)Provide that the aggregate amount to be collected shall not exceed the reasonable costs, as determined by an audit by an independent auditor paid for by the airport, to finance, design, construct, operate, maintain, or otherwise improve, as applicable, those facilities, systems, and modifications. Specify that the auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge and that a copy of the audit shall be provided to the Assembly and Senate Committees on Judiciary, the Assembly Committee on Transportation, and the Senate Committee on Transportation and Housing and shall be posted on the airport's Internet Web site. 3)Make legislative findings and declarations as to the necessity of a special statute for the Los Angeles International Airport. 4)Specify that the provisions of this bill shall not apply to any fee, including an alternative fee, required by an airport other than the Los Angeles International Airport to be collected by a rental company from a renter. 5)Declare that this bill shall take effect immediately as an urgency statute. EXISTING LAW: 1)Sets forth general rules governing contracts between rental AB 2280 Page 3 car companies and their customers on a variety of matters, including, but not limited to, the authority of airports to require rental car companies to charge customers a fee to construct and operate consolidated rental car facilities at the airport. (Civil Code Section (CIV) 1936; subsequent citations refer to the Civil Code unless otherwise indicated.) 2)Permits a rental car company to collect an authorized customer facility charge at specified airports if certain conditions are met and the fees are used for purposes of maintaining a consolidated rental car facility and a common-use transportation system, and requires the airport to conduct audits as specified. (CIV 1936 (l).) 3)Defines a "customer facility charge" (CFC) to mean any fee required by an airport to be collected by a rental car company from a renter to finance, design, and construct consolidated airport car rental facilities and to operate common-use transportation systems that move passengers between airport terminals and those consolidated car rental facilities, and to acquire vehicles for use in that system. (CIV 1936 (a).) FISCAL EFFECT: None COMMENTS: This bill replicates a provision that was contained in AB 2051 ((O'Donnell), Chapter 183, Statutes of 2016), a bill heard by the Judiciary Committee earlier this session. AB 2051 sought to reorganize the statute (CIV 1936) that governs rental car contracts, fees, disclosures, and advertisements. The bill also contained a number of substantive provisions, most notably provisions relating waiver of liability notices and the ability of rental car companies to use a rental vehicle's GPS technology to locate lost vehicles. The bill also contained a provision that authorized Los Angeles International Airport (LAX) to require rental car companies to charge a "customer facility charge" (CFC) to help finance the design, construction, and improvement of consolidated rental car facilities and the AB 2280 Page 4 transportation systems that move passengers from those facilities to the airport terminal. Generally speaking, consolidated rental car facilities are economically and environmentally preferable, not to mention more convenient, than having rental car companies scattered at different points around the periphery of the airport. The bill, including the provision authorizing LAX to impose a CFC, passed out of the Judiciary Committee on consent. However, the bill was amended in the Senate to remove the LAX fee authorization. Apparently, this provision was removed from AB 2051 in light of questions raised in the Senate Judiciary Committee analysis about the lack of any limitation on the duration of the authority and the possibility that the fee authority could be used as an unending source of revenue for LAX. Bill Addresses Senate Committee Concerns: After the LAX fee authorization was deleted from AB 2051, its essential provisions were placed into this bill. There is, however, one important difference between this bill and the provision that was deleted from AB 2051. In order to address the concerns about the lack of any time limitation on the fee authority, the current bill specifies that the CFC authority shall become inoperative once the bonds, capital contributions, or other forms for financing are paid or reimbursed, and in any event the maximum term for financing shall not exceed 35 years. In short, the Judiciary Committee already passed the essential provisions of this bill - granting LAX authority to require a CFC to finance consolidated car rental facilities - when it passed AB 2051, with the exception that this bill appropriately adds a time limitation on that fee authority. Background: In 1999, the Legislature passed and the Governor signed SB 1228 ((Vasconcellos), Chapter 760, Statutes of 1999), which gave the San Jose International Airport the authority to require rental car companies to charge customers a customer facility fee , for the purpose of financing a consolidated rental car facility. In subsequent years, additional airports were granted such authority so long as specified conditions were met, including a requirement that the airport conduct an audit in order to ensure that the fees were reasonable and properly AB 2280 Page 5 used. Since the initial legislation was enacted, airport authorities have used this tool to reap the many benefits of having rental car facilities in a single location serviced by a common transportation system, as opposed to having rental car companies spread out in various places around the periphery of the airport. Not only do consolidated rental car facilities move passengers more efficiently and conveniently to their respective destinations, but they also have economic and environmental advantages. This bill would authorize LAX - one the busiest airports in the world - to impose a CFC in order to design, construct, operate, and improve a consolidated car rental facility and a common transportation system to service the consolidated facility. Consistent with past authorizations, this bill would require an audit and report to the Legislature in order to ensure that fees are reasonably related to costs. Finally, this bill provides that the CFC authority shall become inoperative once the bonds or other financing mechanism are paid or reimbursed, and in any event the authority shall not exceed 35 years. Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334 FN: 0004977