BILL ANALYSIS
SB 1192
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1192 (Oropeza) - As Amended: August 2, 2010
Policy Committee: JudiciaryVote:7-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides for a new method of calculating and
controlling consumer facility charges (CFCs) for specific
airport consolidated rental car facilities. Specifically, this
bill:
1)Authorizes the Bob Hope (Burbank) Airport, Fresno Yosemite
International Airport, Los Angeles International Airport, and
San Diego International Airport to use an alternative
mechanism for collecting a 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, and specifies limits for this fee
graduated over time.
2)Requires the four airports, in order to use the alternative
CFC authority provided in (1) to follow a specified process,
complete an independent audit required at specified times, and
provide annual reports to the Assembly and Senate Judiciary
Committees.
3)Requires the State Controller to review the audits in (2) and
independently examine and substantiate the need for and amount
of the CFC, and to report its findings to the Legislature. The
Controller's costs are to be reimbursed by the airports.
4)Requires the airports wishing to exercise the above authority
to do so before January 1, 2018.
5)Expands the purposes to which a customer facility charge (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
SB 1192
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acquire vehicles for a common-use transportation system.
FISCAL EFFECT
1)All costs to the Controller will be reimbursed by any of the
specified airports that seek to assess the alternative CFC.
If, at most, two audit reviews were required within a year and
required one auditor, the reimbursed cost to the Controller's
Office would be less than $100,000.
2)The state, which incurs around 220,000 car rental days per
year, could experience unknown increased costs for multi-day
rentals at the specified airports. (These increased costs
could be partially offset by reduced costs for single-day
rentals at these airports.) Regardless, any increased costs
would be allocated among a multitude of fund sources, thus the
impact on any single fund would likely be minor.
COMMENTS
1)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. 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 statutorily authorized rental car user fees for customers
who choose to rent from an on-airport rental car company.
2)Purpose . This bill permits the four covered airport operators
to collect an alternative fee based on an amount per day
during the rental period (capped at a maximum of five days),
rather than the current $10 rate per-contract. Supporters
argue, "[The current] 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
affected."
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3)Enhanced Oversight . This bill would permit the alternative
customer facility charge to be collected after a review and
approval process, beginning with a public hearing at the
airport and subject to a further review by the State
Controller to substantiate the need for and amount of the fee
request. According to a survey by the sponsor (City of Los
Angeles), six airports are currently collecting a CFC, but
none of the six have completed the audit required by existing
law. The new review and approval process is designed to
ensure that there is better oversight and accountability.
4)What's Good for the Goose? This bill authorizes an alternative
CFC for four airports only. Given the deliberative process and
enhanced oversight attached to enacting such a fee, it is
unclear why only the four specified airports should be
authorized to avail themselves to this alternative. The bill
should be amended to allow any airport to enact an alternative
CFC pursuant to these provisions.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081