Existing law authorizes airports to require rental companies to collect a customer facility charge for specified purposes and requires airports to provide certain audits and reports regarding those fees to specified committees of the Legislature.

This bill would authorize the Los Angeles International Airport to charge those same fees for additional specified purposes and would require that airport to provide certain audits and reports regarding those fees to specified committees of the Legislature.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles International Airport.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law authorizes airports to require rental companies to collect a customer facility charge for specified purposes and requires airports to provide certain audits and reports regarding those fees to specified committees of the Legislature.

This bill would authorize the Los Angeles International Airport to charge those same fees for additional specified purposes and would require that airport to provide certain audits and reports regarding those fees to specified committees of the Legislature.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Los Angeles International Airport.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law creates the California Housing Finance Agency, which is administered by a board of directors and which is supervised on a day-to-day basis by an executive director. Existing law provides that the primary purpose of the agency is to meet the housing needs of persons and families of low to moderate income. Existing law authorizes the agency to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others.

This bill would generally prohibit require the agency from changing agency, within 5 business days of making a change to the eligibility requirements for a housing or lending program that the agency administrates without providing administrates, to provide a lender or other party participating in the program notice of the change at least unless providing that notice within 5 business days prior to the change taking effect. days would impose an undue burden on the agency. The bill would require authorize the notice to be provided by a program bulletin and that the program bulletin be posted on the agencys Internet Web site. The bill would permit the agency to make a change in eligibility requirements without satisfying the notification requirements upon a specified finding of the agencys executive director or a vote of the board of directors. The bill would require the agency to require a lender or other party participating in these programs to have protocols that provide timely notification to representatives of the participants of changes to program eligibility requirements. bulletin.

Existing law creates the California Housing Finance Agency, which is administered by a board of directors and which is supervised on a day-to-day basis by an executive director. Existing law provides that the primary purpose of the agency is to meet the housing needs of persons and families of low to moderate income. Existing law authorizes the agency to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others.

This bill would generally prohibit the agency from changing the eligibility requirements for a housing or lending program that the agency administrates without providing a lender or other party participating in the program notice of the change at least 5 business days prior to the change taking effect. The bill would require the notice to be provided by a program bulletin and that the program bulletin be posted on the agencys Internet Web site. The bill would permit the agency to make a change in eligibility requirements without satisfying the notification requirements upon a specified finding of the agencys executive director or a vote of the board of directors. The bill would require the agency to require a lender or other party participating in these programs to have protocols that provide timely notification to representatives of the participants of changes to program eligibility requirements.

Date of Hearing: August 31, 2016

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 2280

Author:(Ridley-Thomas) – As Amended Ver:August 15, 2016

FOR CONCURRENCE

SUBJECT: Rental companies: customer facility charge

KEY ISSUE: should the los angeles international airport be authorized to require rental car companies to charge customer facility fees to finance consolidated rental car facilities?

SYNOPSIS

This bill authorizes the Los Angeles International Airport (LAX) to require rental car companies to charge a customer facility charge (CFC) for the purpose of financing, constructing, designing, and improving consolidated rental car facilities, an authority the Legislature has granted to other airports beginning in 1999. Language granting this authorization to LAX was originally in AB 2051, a bill that dealt with various aspects of the statute that regulates rental car contracts and various fees imposed by government or other entities which this Committee passed on consent. However, AB 2051 was amended in the Senate to remove the CFC authorization for LAX. Subsequently, the fee authorization provision removed from AB 2051 was placed in a gutted AB 2280, the bill presently before this Committee. There is, however, one significant difference between AB 2051 and AB 2280. AB 2051 did not contain any time limitation on the fee authority, whereas this bill specifies that the fee authority becomes inoperative once the bonds or other financing mechanisms are reimbursed and specifies that the authority shall not exceed 35 years. Additionally, unlike AB 2051, which amended the Civil Code statute regulating rental car contracts, this bill adds a provision to a part of the Government Code that authorizes an airport to require a rental car company to charge a fee to support an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and an airport rental car facility. The bill is supported by the City of Los Angeles, the State Building and Construction Trades Council, the California Conference of Carpenters, and the Service Employees International Union. There is no registered opposition to this bill.

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. Specifically, this bill:

1. Authorizes 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 terminals and those consolidated vehicle rental facilities, and to acquire vehicles for use in that system. Specifies 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. Provides 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. Specifies 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. Makes legislative findings and declarations as to the necessity of a special statute for the Los Angeles International Airport.
4. Specifies 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. Declares that this bill shall take effect immediately as an urgency statute.

EXISTING LAW:

1. Sets forth general rules governing contracts between rental 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 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. (Section 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. (Section 1936 (a).)
4. Authorizes an airport operated by a city and county to require a rental car company to collect a fee from its customers on behalf of the airport for the use of an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility, subject to certain conditions. (Government Code Section 50474.1.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: This bill replicates a provision that was contained in AB 2051 (O'Donnell, Chapter 183, Statutes of 2016), a bill heard by this Committee earlier this session. AB 2051 sought to reorganize the statute that governs rental car contracts, fees, disclosures, and advertisements: Civil Code Section 1936. AB 2051 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. Finally, AB 2051 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 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. AB 2051, 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 Appears to Address Senate Committee Concern: After the LAX fee authorization was deleted from AB 2051 in the Senate, it was placed into the bill presently before this Committee, AB 2280. 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, for a term not to exceed 35 years. This bill also differs from AB 2051 in one more way. Whereas AB 2051 amended the Civil Code statute regulating rental car contracts, this bill adds a provision to a part of the Government Code that authorizes an airport to require a rental car company to charge a fee to support an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and an airport rental car facility. These differences notwithstanding, this committee has 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.

Background: In 1999, the Legislature passed and the Governor signed SB 1288 (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 to ensure that the fees were reasonable and properly 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, the 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.

ARGUMENTS IN SUPPORT: According to the author:

Section 1936 of the California Civil Code defines “customer facility charge.” Section 50474.1 of California Government Code authorizes an airport operated by a city and county to “require a rental car company, in writing, to collect a fee from its customers on behalf of the airport for the use of an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility.”

AB 2280, as amended, will add Section 50474.22 to the California Government Code to expand the types of financing arrangements that customer facility charge (CFC) revenue collected at LAX can cover to include bonds, capital contributions, availability payment contracts, lease agreements, or other forms for financing, and would specify that the authorization to collect CFC revenue shall become inoperative when the financing is paid or reimbursed. AB 2280 would also clarify that CFC revenue collected at LAX fund consolidated airport vehicle rental facilities, common-use transportation systems, and authorized terminal modifications.

This bill is needed due to the unique circumstances and operations of the Los Angeles International Airport. Further, this bill will address pressing public safety concerns at LAX by providing necessary financing tools.

REGISTERED SUPPORT / OPPOSITION:

Support

California Conference of Carpenters

California State Building and Construction Trades Council

Los Angeles World Airports Authority of the City of Los Angeles

Service Employees International Union, California

Opposition

None on file

Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334

(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 2280

Author:(Ridley-Thomas)

As Amended Ver:August 15, 2016

2/3 vote. Urgency

(vote not relevant)

(Jud.)

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 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 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 global positioning system (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 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 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: 0005018

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2280

Author:(Ridley-Thomas)

As Amended Ver:August 15, 2016

2/3 vote. Urgency

(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 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 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 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 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

 THIRD READING  

Bill No: AB 2280

Author:

:

Vote:

PRIOR VOTES NOT RELEVANT

SENATE JUDICIARY COMMITTEE: 7-0, 8/29/16 (pursuant to Senate Rule 29.10)

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

SUBJECT:

SOURCE: Los Angeles World Airports

DIGEST: This bill establishes a new authority for the Los Angeles International Airport (LAX) to require rental car companies to collect a customer facility charge (CFC) that can be used for specified purposes, including for the design, construction, and improvement of consolidated airport vehicle rental facilities. This bill also authorizes LAX to use CFC revenue to pay or repay bonds, capital contributions, availability payment contracts, lease agreements, or other forms of authorized financing used to design, construct, or improve consolidated airport vehicle rental facilities and specified related infrastructure, for a period not to exceed 35 years.

ANALYSIS:

Existing law:

1. Governs contracts between rental car companies and their customers in connection with the rental of passenger vehicles. (Civ. Code Sec. 1936 et seq.)
2. Defines a “Customer Facility Charge” as any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter for any of the following purposes:

• To finance, design, and construct consolidated airport car rental facilities;
• To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated car rental facilities, and acquire vehicles for use in that system; or
• To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. (Civ. Code Sec. 1936(a)(6)(A).)

1. States that the aggregate amount of CFC revenue to be collected shall not exceed the reasonable costs, as determined by an independent audit paid for by the airport, to finance, design, and construct these facilities. Existing law requires, in the case of a transportation system, the audit to also consider the reasonable costs of providing the transit system or busing network. (Civ. Code Sec. 1936(a)(6)(B).)
2. Prohibits fees designated as a CFC from being used to pay for terminal expansion, gate expansion, runway expansion, changes in hours of operation, or changes in the number of flights arriving or departing from the airport. (Civ. Code Sec. 1936(a)(6)(B).)
3. Specifies that the authorization for an airport, except for the Oakland International Airport, to impose a CFC shall become inoperative when the bonds used for financing are paid. (Civ. Code Sec. 1936(a)(6)(C).)
4. Specifies that if a bond or other form of indebtedness is not used for financing, or the bond or other form of indebtedness used for financing has been paid, the Oakland International Airport may require the collection of a CFC for a period of up to 10 years from the imposition of the charge. (Civ. Code Sec. 1936(a)(6)(D).)

This bill:

1. Expands, for LAX, the range of permissible uses to which CFC revenue may be applied to include the maintenance and improvement of consolidated airport vehicle rental facilities, common-use transportation systems, and authorized terminal modifications, as specified.
2. Expands, for LAX, the types of financing arrangements toward which CFC revenue may be directed to include bonds, capital contributions, availability payment contracts, lease agreements, or other forms for financing, and specifies that the authorization to collect CFC revenue shall become inoperative when the financing is paid or reimbursed.
3. Specifies, for LAX, that the maximum term for financing toward which CFC revenue may be directed shall not exceed 35 years.

Background

In recent years, many airports have adopted the practice of locating rental car services in consolidated facilities that house all car rental companies in one location. Common-use transportation systems, including shuttle bus systems and automated trains, are often used to transport rental car customers to and from terminals and the consolidated rental car facility. These facilities and their associated transport systems are financed largely via CFCs collected from rental car patrons who choose to rent a vehicle from a company housed in the consolidated rental facility.

The authority to collect CFC charges began in California in 1999 when the Legislature passed and the Governor signed SB 1228 (Vasconcellos, Chapter 760, Statutes of 1999), which permitted San Jose International Airport to collect a CFC of $10.15 per rental contract to finance and construct a consolidated rental car facility. In 2001, AB 491 (Frommer, Chapter 661, Statutes of 2001) authorized other public airports in California to collect a $10 fee per contract to finance, design, and construct consolidated rental car facilities. In 2007, SB 641 (Corbett, Chapter 44, Statutes of 2007) repealed the special authorization for San Jose International Airport and instead applied the more general provisions enacted by AB 491 to San Jose International Airport, thus permitting it to collect a $10 per contract CFC.

For approximately 10 years, the allowable CFC fee was set at $10 per rental contract, regardless of the duration of the car rental. In 2010, the Legislature revised the CFC fee structure in response to feedback from the airports that the existing $10 per contract fee was inadequate to fund some proposed consolidated rental car facilities. SB 1192 (Oropeza, Chapter 642, Statutes of 2010) permitted airports to impose a CFC calculated on an alternative basis, which, under current law, allows up to $6 per day for a maximum of five days per rental contract to be collected. The new CFC fee structure allows an airport to increase its daily CFC according to a statutory schedule which would permit the collection of up to $45 over the length of a rental contract by January 1, 2017. SB 1192 also expanded the range of uses for which CFC revenue could be spent, including purchasing vehicles for a common-use transport system that would shuttle passengers between the consolidated rental facility and the airport terminals, and for terminal modifications undertaken to provide access to a common-use transport system.

In order to protect customers and ensure that the CFC charged by an airport was appropriately and necessarily spent on consolidated rental facilities and associated common-use transport systems, SB 1192 also imposed an audit requirement, directing airports to complete independent audits of CFC funded projects prior to the initial charge of a CFC, prior to any increase in the CFC, and every three years after its initial collection or any increase. SB 1192 initially required the State Controller’s Office to review these audits, but SB 1006 (Senate Budget and Fiscal Review Committee, Chapter 32, Statutes of 2012) eliminated this requirement. SB 1006, a Budget Trailer Bill, also struck language in existing law that set out guidelines regarding the scope of a CFC audit and the standards for determining whether an airport’s chosen CFC rate was necessary and justified based on how the funds were being spent. The following year, AB 359 (Holden, Chapter 549, Statutes of 2013) re-inserted guidelines regarding the scope of CFC audits, and required audits to be posted on an airport’s Internet Web site.

Under existing law, CFC revenue is generally used to pay back bonds issued for the construction of combined rental facilities, certain terminal modifications, and the construction and operation of common-use transportation systems. Existing law states that upon repayment of these bonds, the authority to collect a CFC is eliminated. This bill, for LAX, expands the types of debts that may be repaid with CFC revenue to include capital contributions, availability payment contracts, lease agreements, or other forms of financing. This bill also, for LAX, increases the range of allowable uses to which CFC revenue could be directed to include improving combined rental facilities, maintaining or improving common-use transportation systems, and improving terminal modifications, as specified. Finally, this bill specifies that the maximum term for financing backed by this separate CFC authority shall not exceed 35 years.

Comments

The author writes:

Section 1936 of the California Civil Code defines “customer facility charge.” Section 50474.1 of California Government Code authorizes an airport operated by a city and county to “require a rental car company, in writing, to collect a fee from its customers on behalf of the airport for the use of an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility.” Section 50474.1 of California Government Code also lays out provisions related to use of that fee.

AB 2280, as amended, will add Section 50474.22 to the California Government Code to expand the types of financing arrangements that customer facility charge (CFC) revenue collected at LAX can cover to include bonds, capital contributions, availability payment contracts, lease agreements, or other forms for financing, and would specify that the authorization to collect CFC revenue shall become inoperative when the financing is paid or reimbursed. AB 2280 would also clarify that CFC revenue collected at LAX fund consolidated airport vehicle rental facilities, common-use transportation systems, and authorized terminal modifications.

This bill is needed due to the unique circumstances and operations of the Los Angeles International Airport. Further, this bill will address pressing public safety concerns at LAX by providing necessary financing tools.

Related/Prior Legislation

AB 2051 (O’Donnell, Chapter 183, Statutes of 2016) recast and reorganized law pertaining to contracts between rental car companies and their customers in connection with the rental of a passenger vehicle, and made technical and clarifying changes to existing law.

AB 675 (Alejo, Chapter 333, Statutes of 2015) authorized a rental company, when quoting a rental rate, to separately state the rental rate, additional mandatory charges, if any, and a mileage charge, if any, that a renter must pay to hire or lease the vehicle for the period of time to which the rental rate applies. The bill defined “additional mandatory charges” to mean any separately stated charges that the rental car company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental car business, including, but not limited to, a CFC, airport concession fee, tourism commission assessment, vehicle license recovery fee, or other government imposed taxes or fees.

AB 1981 (Brown, Chapter 417, Statutes of 2014) removed the manufacturer’s suggested retail price as one of the criteria for determining the rate of a damage waiver sold by a rental company, and instead set the rate of damage waivers according to the vehicle’s classification using criteria set by the 2014 Association of Car Rental Industry Systems Standards for North America. The bill increased the maximum rate of the damage waiver to $11 per rental day for vehicles designated as an “economy car,” “compact car,” or another term denoting the two smallest categories of vehicles described by the standards. The bill increased the maximum rate of the damage waiver to $17 per rental day for vehicles in the next three body-size categories of vehicles designated in the standards, except as specified.

AB 2747 (Committee on Judiciary, Chapter 913, Statutes of 2014), the Assembly Committee on Judiciary’s Omnibus Bill extended until January 1, 2020, a sunset provision pertaining to a requirement for rental companies to accept service of a summons and complaint against a renter who resides out of this country for an accident or collision resulting from the operation of the rental vehicle in this state, as provided.

AB 359 (Holden, Chapter 549, Statutes of 2013) provided guidelines regarding the scope of a CFC audit, and required audits to be posted on an airport’s Internet Web site. The bill removed the requirement that an airport conduct an audit every three years after the initial collection of the CFC, and instead require an airport to conduct an audit every three years after the initial collection of the CFC only if the charge is used for the purpose of operating a common-use transportation system or to acquire vehicles for use in such a system.

SB 1006 (Committee on Budget and Fiscal Review, Chapter 32, Statutes of 2012) See Background.

SB 1192 (Oropeza, Chapter 642, Statutes of 2010) See Background.

SB 641 (Corbett, Chapter 44, Statutes of 2007) See Background.

AB 491 (Frommer, Chapter 661, Statutes of 2001) See Background.

SB 1228 (Vasconcellos, Chapter 760, Statutes of 1999) See Background.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/29/16)

Los Angeles World Airports (source)

California Conference of Carpenters

City of Los Angeles

Service Employees International Union, California

State Building and Construction Trades Council

OPPOSITION: (Verified 8/29/16)

None received

Prepared by:

8/30/16 14:36:18

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: AB 2280 (Author:Ridley-Thomas)

Version: August 15, 2016

Hearing Date: August 29, 2016

Fiscal: No

Urgency: Yes

Consultant: TH

SUBJECT

Rental Companies: Customer Facility Charge

DESCRIPTION

Existing law governs contracts between rental car companies and their customers in connection with the rental of passenger vehicles. Under existing law, a rental car company may collect, in addition to the rental rate, certain fees and charges, including a customer facility charge. Existing law authorizes airports to require rental companies to collect a customer facility charge to finance, design, and construct consolidated airport vehicle rental facilities, common-use transportation systems that move passengers between airport terminals and car rental facilities, and terminal modifications made solely to provide customer access to common-use transportation systems.

This bill establishes a separate authority for the Los Angeles International Airport (LAX) to require rental car companies to collect a customer facility charge that can be used for additional specified purposes, including the improvement of consolidated airport vehicle rental facilities. This bill also authorizes LAX to use customer facility charge revenue to pay or repay bonds, capital contributions, availability payment contracts, lease agreements, or other forms of authorized financing used to design, construct, or improve consolidated airport vehicle rental facilities and specified related infrastructure, for a period not to exceed 35 years.

BACKGROUND

In recent years, many airports have adopted the practice of locating rental car services in consolidated facilities that house all car rental companies in one location. Common-use transportation systems, including shuttle bus systems and automated trains, are often used to transport rental car customers to and from terminals and the consolidated rental car facility. These facilities and their associated transport systems are financed largely via Customer Facility Charges (CFCs) collected from rental car patrons who choose to rent a vehicle from a company housed in the consolidated rental facility.

The authority to collect CFC charges began in California in 1999 when the Legislature passed and the governor signed SB 1228 (Vasconcellos, Ch. 760, Stats. 1999), which permitted San Jose International Airport to collect a customer facility charge of $10.15 per rental contract to finance and construct a consolidated rental car facility. In 2001, AB 491 (Frommer, Ch. 661, Stats. 2001) authorized other public airports in California to collect a $10 fee per contract to finance, design, and construct consolidated rental car facilities. In 2007, SB 641 (Corbett, Ch. 44, Stats. 2007) repealed the special authorization for San Jose International Airport and instead applied the more general provisions enacted by AB 491 to San Jose International Airport, thus permitting it to collect a $10 per contract CFC.

For approximately ten years, the allowable CFC fee was set at $10 per rental contract, regardless of the duration of the car rental. In 2010, the Legislature revised the CFC fee structure in response to feedback from the airports that the existing $10 per contract fee was inadequate to fund some proposed consolidated rental car facilities. SB 1192 (Oropeza, Ch. 642, Stats. 2010) permitted airports to impose a CFC calculated on an alternative basis, which, under current law, allows up to $6 per day for a maximum of five days per rental contract to be collected. The new CFC fee structure allows an airport to increase its daily CFC according to a statutory schedule which would permit the collection of up to $45 over the length of a rental contract by January 1, 2017. SB 1192 also expanded the range of uses for which CFC revenue could be spent, including purchasing vehicles for a common-use transport system that would shuttle passengers between the consolidated rental facility and the airport terminals, and for terminal modifications undertaken to provide access to a common-use transport system.

In order to protect customers and ensure that the CFC charged by an airport was appropriately and necessarily spent on consolidated rental facilities and associated common-use transport systems, SB 1192 also imposed an audit requirement, directing airports to complete independent audits of CFC funded projects prior to the initial charge of a CFC, prior to any increase in the CFC, and every three years after its initial collection or any increase. SB 1192 initially required the State Controller’s Office to review these audits, but SB 1006 (Senate Budget and Fiscal Review Committee, Ch. 32, Stats. 2012) eliminated this requirement. SB 1006, a budget trailer bill, also struck language in existing law that set out guidelines regarding the scope of a CFC audit and the standards for determining whether an airport’s chosen CFC rate was necessary and justified based on how the funds were being spent. The following year, AB 359 (Holden, Ch. 549, Stats. 2013) re-inserted guidelines regarding the scope of CFC audits, and required audits to be posted on an airport’s Internet Web site.

Under existing law, CFC revenue is generally used to pay back bonds issued for the construction of combined rental facilities, certain terminal modifications, and the construction and operation of common-use transportation systems. Existing law states that upon repayment of these bonds, the authority to collect a CFC is eliminated. This bill would, for the Los Angeles International Airport, expand the types of debts that may be repaid with CFC revenue to include capital contributions, availability payment contracts, lease agreements, or other forms of financing. This bill would also, for the Los Angeles International Airport, increase the range of allowable uses to which CFC revenue could be directed to include improving combined rental facilities, maintaining or improving common-use transportation systems, and improving terminal modifications, as specified. Finally, this bill would specify that the maximum term for financing backed by this separate CFC authority shall not exceed 35 years.

CHANGES TO EXISTING LAW

Existing law, Civil Code Section 1936, governs contracts between rental car companies and their customers in connection with the rental of passenger vehicles.

Existing law defines a “Customer Facility Charge” (CFC) as any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter for any of the following purposes:

• to finance, design, and construct consolidated airport car rental facilities;
• to finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated car rental facilities, and acquire vehicles for use in that system; or
• to finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. (Civ. Code Sec. 1936(a)(6)(A).)

Existing law states that the aggregate amount of CFC revenue to be collected shall not exceed the reasonable costs, as determined by an independent audit paid for by the airport, to finance, design, and construct these facilities. Existing law requires, in the case of a transportation system, the audit to also consider the reasonable costs of providing the transit system or busing network. (Civ. Code Sec. 1936(a)(6)(B).)

Existing law prohibits fees designated as a customer facility charge from being used to pay for terminal expansion, gate expansion, runway expansion, changes in hours of operation, or changes in the number of flights arriving or departing from the airport. (Civ. Code Sec. 1936(a)(6)(B).)

Existing law specifies that the authorization for an airport, except for the Oakland International Airport, to impose a CFC shall become inoperative when the bonds used for financing are paid. (Civ. Code Sec. 1936(a)(6)(C).)

Existing law specifies that if a bond or other form of indebtedness is not used for financing, or the bond or other form of indebtedness used for financing has been paid, the Oakland International Airport may require the collection of a customer facility charge for a period of up to 10 years from the imposition of the charge. (Civ. Code Sec. 1936(a)(6)(D).)

This bill would, for the Los Angeles International Airport, expand the range of permissible uses for which a CFC may be applied to include the maintenance and improvement of consolidated airport vehicle rental facilities, common-use transportation systems, and authorized terminal modifications, as specified.

This bill would, for the Los Angeles International Airport, expand the types of financing arrangements toward which CFC revenue may be directed to include bonds, capital contributions, availability payment contracts, lease agreements, or other forms for financing, and would specify that the authorization to collect CFC revenue shall become inoperative when the financing is paid or reimbursed.

This bill would, for the Los Angeles International Airport, specify that the maximum term for financing toward which CFC revenue may be directed shall not exceed 35 years.

COMMENT

1. Stated need for the bill

The author writes:

Section 1936 of the California Civil Code defines “customer facility charge.” Section 50474.1 of California Government Code authorizes an airport operated by a city and county to “require a rental car company, in writing, to collect a fee from its customers on behalf of the airport for the use of an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility.” Section 50474.1 of California Government Code also lays out provisions related to use of that fee.

AB 2280, as amended, will add Section 50474.22 to the California Government Code to expand the types of financing arrangements that customer facility charge (CFC) revenue collected at LAX can cover to include bonds, capital contributions, availability payment contracts, lease agreements, or other forms for financing, and would specify that the authorization to collect CFC revenue shall become inoperative when the financing is paid or reimbursed. AB 2280 would also clarify that CFC revenue collected at LAX fund consolidated airport vehicle rental facilities, common-use transportation systems, and authorized terminal modifications.

This bill is needed due to the unique circumstances and operations of the Los Angeles International Airport. Further, this bill will address pressing public safety concerns at LAX by providing necessary financing tools.

1. Landside access modernization program

The CFC revenue authorized by this bill is intended to provide a long-term revenue source to pay, in part, for planned infrastructure improvements at the Los Angeles International Airport (LAX). According to the Los Angeles World Airports:

In November 2015, the Los Angeles Board of Airport Commissioners announced plans to deliver a world-class transportation system to Los Angeles International Airport (LAX) through the estimated $5 billion Landside Access Modernization Program (LAMP).

The centerpiece of LAMP will be an Automated People Mover (APM) that will connect the Central Terminal Area (CTA) with a new Consolidated Rent-A-Car facility (CONRAC), with stops in-between at new airport parking facilities and a station connecting to the Los Angeles County Metropolitan Transportation Authority (LA Metro) regional transit system. LAWA’s focus on addressing aging infrastructure, new technologies, and improving passenger levels of service has shaped the development plans for the LAMP improvements at LAX.

The LAMP improvements, as laid out above, aim to:

• transform LAX into a world-class destination airport and enhance the passenger experience;
• relieve traffic congestion in the CTA and on area surface streets and roads;
• connect to transit, reducing private vehicle trips to LAX;
• create new options for passenger pick-up and drop-off;
• give passengers a fast and reliable new way to get to their flights; and
• reduce vehicle emissions and improve air quality.

The LAMP improvements will further transform LAX into a world-class airport by relieving traffic congestion within the terminal area and on surrounding streets, by improving access options and the travel experience for passengers, and by providing a connection to the light-rail system being extended by the Los Angeles County Metropolitan Transportation System (LA Metro).

1. New allowable uses for Consumer Facility Charge revenue

Over the last 17 years, several California airports have financed the design and construction of consolidated rental car facilities and their associated transport systems through the collection of Customer Facility Charges (CFC) from rental car patrons who choose to rent a vehicle from a company housed in a consolidated rental facility. Existing law governing the collection and use of CFC funds includes strong consumer protection provisions designed to ensure that airports do not misuse or over-collect these funds. Under existing law, an airport that imposes a CFC fee for the first time or that increases its CFC fee must conduct an audit that ensures the fees are necessary to construct consolidated rental facilities and their associated transport systems, that the fees would not or are not being used to fund unauthorized airport construction, and that the chosen CFC fee level is reasonable, taking into account alternate revenue sources for constructing these facilities. Existing law also limits the uses to which CFC revenue can be directed to, principally, the design and construction of combined rental facilities, certain terminal modifications, and the construction and operation of common-use transportation systems. Existing law also specifies that, with the exception of the Oakland International Airport (OAK), CFC funds may be directed to pay off bonds used for the financing of these projects, and in the case of OAK, that if alternate financing is used, the authority to impose a CFC is limited to 10 years.

This bill would, in the case of the Los Angeles International Airport (LAX), authorize CFC revenue to be collected and used for the improvement of these facilities, and would also authorize CFC revenue to be directed toward paying off other financing arrangements for the facilities, including capital contributions and lease agreements. Authorizing CFC revenue to be directed toward financing arrangements other than bonds could have several benefits to LAX, including allowing the airport to transfer some of the risk involved in a project to a third party through a public-private partnership. Involvement of third parties through leaseback agreements could also allow an airport to potentially lower the cost of a combined rental car facility and related infrastructure by allowing the third party to depreciate the value of these assets – something a city cannot typically do.

However, authorizing these new forms of financing could also significantly increase the cost passed on to consumers. Market pressure in bond markets tends to confine the amount of financing and repayment terms an airport can obtain for a project. Other financing arrangements, such as a sale-leaseback or lease-leaseback, could potentially allow an airport to avoid these market confines by liberalizing the terms on which combined rental car facilities are constructed and paid off. Whether any alternate financial arrangement is economical for a local agency depends on a variety of factors, including market conditions, tax laws, lease structure, and the relative costs of other financing arrangements.

The normal pressure of limited resources that drives government decisionmakers to make economically sound decisions concerning infrastructure finance may not be present in situations where external revenue streams can be diverted indefinitely to repay such obligations, including obligations backed by CFC revenue where much of the cost can be passed on to rental car customers. Recognizing this problem, AB 2280 imposes a strict time limit of 35 years as the maximum term for financing backed by LAX’s new CFC authorization. Given the expanded purposes to which CFC revenue can be directed under this bill, this explicit repayment limitation ensures that this new authorization for LAX does not turn CFC revenue into an unending source of funding at the expense of Californians and others who rent cars.

1. Other concerns

Enterprise Holdings, Inc., requests that this bill be amended to specify that consumers are not required to pay multiple CFCs when renting a vehicle from an airport. They write:

Under existing law, airports can require rental car companies to charge consumers a CFC of up to $45 per contract. That CFC is passed through to the airport and used to pay for the consolidated rental car facility, transportation systems and general terminal modifications.

We oppose any attempt to require consumers to pay more than one CFC per rental contract. Any attempt to double charge consumers would be contrary to the intent of the Legislature in authorizing collection of CFCs and result in customers paying up to $90 in airport facility charges per rental.

For the above reasons, Enterprise Holdings would be in support of AB 2280 if amended to include the following language that clearly states that customers can only be charged a single CFC per transaction:

An airport shall not require a rental company to collect a customer facility charge from a consumer pursuant to this article if that requirement would result in the rental company collecting more than one customer facility charge from that consumer in connection with a single rental.

While Enterprise’s requested amendment likely re-states existing law, the amendment is arguably outside the scope of the present bill. The Committee may wish to consider clarifying language such as this in future legislation addressing rental cars.

Support: City of Los Angeles; State Building and Construction Trades Council; Service Employees International Union, California

Opposition: None Known

HISTORY

Source: Los Angeles World Airports

Related Pending Legislation: None Known

Prior Legislation:

AB 2051 (O’Donnell, Ch. 183, Stats. 2016) recast and reorganized law pertaining to contracts between rental car companies and their customers in connection with the rental of a passenger vehicle, and made technical and clarifying changes to existing law.

AB 675 (Alejo, Ch. 333, Stats. 2015) authorized a rental company, when quoting a rental rate, to separately state the rental rate, additional mandatory charges, if any, and a mileage charge, if any, that a renter must pay to hire or lease the vehicle for the period of time to which the rental rate applies. This bill defined “additional mandatory charges” to mean any separately stated charges that the rental car company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental car business, including, but not limited to, a customer facility charge, airport concession fee, tourism commission assessment, vehicle license recovery fee, or other government imposed taxes or fees.

AB 1981 (Brown, Ch. 417, Stats. 2014) removed the manufacturer’s suggested retail price as one of the criteria for determining the rate of a damage waiver sold by a rental company, and instead set the rate of damage waivers according to the vehicle’s classification using criteria set by the 2014 Association of Car Rental Industry Systems Standards for North America. This bill increased the maximum rate of the damage waiver to $11 per rental day for vehicles designated as an “economy car,” “compact car,” or another term denoting the two smallest categories of vehicles described by the standards. This bill increased the maximum rate of the damage waiver to $17 per rental day for vehicles in the next three body-size categories of vehicles designated in the standards, except as specified.

AB 2747 (Cmte. on Judiciary, Ch. 913, Stats. 2014), the Assembly Committee on Judiciary’s Omnibus Bill extended until January 1, 2020, a sunset provision pertaining to a requirement for rental companies to accept service of a summons and complaint against a renter who resides out of this country for an accident or collision resulting from the operation of the rental vehicle in this state, as provided.

AB 359 (Holden, Ch. 549, Stats. 2013) provided guidelines regarding the scope of a CFC audit, and required audits to be posted on an airport’s Internet Web site. This bill removed the requirement that an airport conduct an audit every three years after the initial collection of the CFC, and instead require an airport to conduct an audit every three years after the initial collection of the CFC only if the charge is used for the purpose of operating a common-use transportation system or to acquire vehicles for use in such a system.

SB 1006 (Cmte. on Budget, Ch. 32, Stats. 2012) See Background.

SB 1192 (Oropeza, Ch. 642, Stats. 2010) See Background.

SB 641 (Corbett, Ch. 44, Stats. 2007) See Background.

AB 491 (Frommer, Ch. 661, Stats. 2001) See Background.

SB 1228 (Vasconcellos, Ch. 760, Stats. 1999) See Background.

Prior Vote: Prior votes not relevant

**************

 THIRD READING  

Bill No: AB 2280

Author:

:

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 8-3, 6/28/16

AYES: Beall, Cannella, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza

NOES: Allen, Roth, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 74-4, 6/2/16 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill requires the California Housing Finance Agency (CalHFA), within five business days of making a change to the eligibility requirements for a program it administers, to provide a lender or other party participating in the program notice of the change.

ANALYSIS:

Existing law:

1) Provides that the primary purpose of CalHFA is to meet the housing needs of persons and families of low or moderate income.

2) Authorizes CalHFA to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others.

3) Provides that CalHFA is administered by a board of directors and is supervised on a day-to-day basis by an executive director.

This bill:

1) Requires CalHFA, within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide a lender or other party participating in the program with notice of the change, unless providing notice within five days would impose an undue burden on the agency.

2) Provides that the notification may be provided by means of a program bulletin board.

Comments

1. Purpose. According to the author, there have been instances in which a family “assumes it qualifies for a down payment assistance program” only to later find out that it doesn’t. That family must then find other financing and risk losing the opportunity to become first-time homebuyers. The author asserts that that this bill provides certainty to potential homebuyers who participate in programs like the California Homebuyer’s Downpayment Assistance Program. The bill increases confidence in these programs because families can determine acquisitions costs without the fear of eligibility requirements being changed without their knowledge. If changes in a program are made after a prospective homebuyer has entered into a contract to purchase a home, the bill helps those individuals secure other means of financing as soon as possible. Also, directing the public to the agency’s website will reinforce the details of the program administered by the agency and foster improved understanding of the downpayment assistance process.
2. CalHFA background. CalHFA is the state’s affordable-housing bank. CalHFA borrows money from the private financial market at below-market interest rates by issuing tax-exempt revenue bonds. CalHFA passes these interest rate savings on to low- and moderate-income first-time homebuyers and affordable rental housing developers by offering below market-rate mortgages. These bonds are backed only by CalHFA revenues and not by the state General Fund. One program that CalHFA operates is the Mortgage Credit Certificate (MCC) Tax Credit program. The MCC Tax Credit is a federal credit which can reduce potential federal income tax liability, creating additional net spendable income which borrowers may use toward their monthly mortgage payment. This MCC Tax Credit program may enable first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar-for-dollar tax credit on their U.S. individual income tax returns.
3. Current practice for changing eligibility requirements. Due to variable market conditions and bondholder requirements, CalHFA is required to modify aspects of its housing programs, such as income eligibility criteria. Any changes to CalHFA’s policies or eligibility requirements are announced via Program Bulletins which are sent directly to lending partners/loan officers, prominently posted on the Agency’s website, and broadcast through Enews Announcements to anyone who has signed up to receive them. Also, when eligibility requirements change, general program information is immediately updated in CalHFA’s Lender Program Manual, located on CalHFA’s website.

It should be noted that CalHFA does not work directly with prospective homebuyers, but rather with lending institutions. Therefore, lending institutions are the primary audience for program change notifications and are responsible for working with a potential homebuyer to determine if the homebuyer meets eligibility requirements. When changes are imposed on CalHFA programs and products, lenders and consumers with an existing reservation (meaning the loan has been submitted to CalHFA for review and approval) are always honored under the rules in force at the time that reservation is made.

1. Is there a problem to solve? According to the author, a member of the author’s staff was in the market to buy a house and assumed that he qualified for the MCC Tax Credit. The staff member was about to put an offer on a house with the assumption, after working with his broker, that the offer would include financing under the MCC tax credit program. When the program changed, he was left scrambling for another financing option. The author’s office asserts that the issue of informing the public of program changes to the CALHFA programs is broader than this one incident.

When buying a home, financing options and rates often change dramatically from day to day. Even if the lender had received the five days’ notice as required under this bill, it is not clear if that notice would have changed the staffers’ assumption as he searched for a house.

This bill codifies the current CalHFA practice of requiring CalHFA, within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide a lender or other party participating in the program with notice of the change, unless providing notice within five days would impose an undue burden on the agency.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/1/16)

None received

OPPOSITION: (Verified 8/1/16)

None received

ASSEMBLY FLOOR: 74-4, 6/2/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NOES: Brough, Dahle, Beth Gaines, Harper

NO VOTE RECORDED: Hadley, Patterson

Prepared by:

8/3/16 18:23:07

**** END ****

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2015 - 2016 Regular

Bill No: AB 2280 Hearing Date: 6/28/2016

SUBJECT: California Housing Finance Agency notice requirements

DIGEST: This bill requires the California Housing Finance Agency (CalHFA), within five business days of making a change to the eligibility requirements for a program it administers, to provide a lender or other party participating in the program notice of the change.

ANALYSIS:

Existing law:

1) Provides that the primary purpose of CalHFA is to meet the housing needs of persons and families of low or moderate income.

2) Authorizes CalHFA to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others.

3) Provides that CalHFA is administered by a board of directors and is supervised on a day-to-day basis by an executive director.

This bill:

1) Requires CalHFA, within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide a lender or other party participating in the program with notice of the change, unless providing notice within five days would impose an undue burden on the agency.

2) Provides that the notification may be provided by means of a program bulletin board.

COMMENTS:

1) Purpose of the bill. According to the author, there have been instances in which a family “assumes it qualifies for a down payment assistance program” only to later find out that it doesn’t. That family must then find other financing and risk losing the opportunity to become first-time home buyers. The author asserts that that this bill provides certainty to potential homebuyers who participate in programs like the California Homebuyer’s Downpayment Assistance Program. The bill increases confidence in these programs because families can determine acquisitions costs without the fear of eligibility requirements being changed without their knowledge. If changes in a program are made after a prospective home buyer has entered into a contract to purchase a home, the bill helps those individuals secure other means of financing as soon as possible. Also, directing the public to the agency’s website will reinforce the details of the program administered by the agency and foster improved understanding of the downpayment assistance process.

2) CalHFA background. The California Housing Finance Agency (CalHFA) is the state’s affordable-housing bank. CalHFA borrows money from the private financial market at below-market interest rates by issuing tax-exempt revenue bonds. CalHFA passes these interest rate savings on to low- and moderate-income first-time homebuyers and affordable rental housing developers by offering below market-rate mortgages. These bonds are backed only by CalHFA revenues and not by the state General Fund.

One program that CalHFA operates is the Mortgage Credit Certificate (MCC) Tax Credit program. The MCC Tax Credit is a federal credit which can reduce potential federal income tax liability, creating additional net spendable income which borrowers may use toward their monthly mortgage payment. This MCC Tax Credit program may enable first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar-for-dollar tax credit on their U.S. individual income tax returns.

3) Current practice for changing eligibility requirements. Due to variable market conditions and bondholder requirements, CalHFA is required to modify aspects of its housing programs, such as income eligibility criteria. In some cases, this occurs with little warning. It is CalHFA policy that “whenever possible, to provide its lenders a five-day notice through a CalHFA Program Bulletin or Enews announcement regarding program and policy changes.” It goes on to state that “[s]ome exceptions may apply to the notification policy, such as daily interest rate announcements and changes directed by other state (e.g., State Treasurer’s Office), federal (e.g., GSEs, FHA) or private (e.g., Master Servicer and Mortgage Insurance provider) partners who have not allowed sufficient time for a five-day notification.”

Any changes to CalHFA’s policies or eligibility requirements are announced via Program Bulletins which are sent directly to lending partners/loan officers, prominently posted on the Agency’s website, and broadcast through Enews Announcements to anyone who has signed up to receive them. Also, when eligibility requirements change, general program information is immediately updated in CalHFA’s Lender Program Manual, located on CalHFA’s website.

It should be noted that CalHFA does not work directly with prospective homebuyers, but rather with lending institutions. Therefore, lending institutions are the primary audience for program change notifications and are responsible for working with a potential homebuyer to determine if the homebuyer meets eligibility requirements.

Furthermore, CalHFA’s products are contingent upon available resources, and many of the rules are dictated by Master Servicers (this is a bank or entity that is responsible for underwriting and purchasing the first mortgage loan and acts on behalf of CalHFA and in the event the borrower is delinquent or defaults), investors, and in some instances, the State Treasurer’s Office. When changes are imposed on CalHFA programs and products, lenders and consumers with an existing reservation (meaning the loan has been submitted to CalHFA for review and approval) are always honored under the rules in force at the time that reservation is made.

Presently, on the MCC Tax Credit Program web page, CalHFA advises: “Since CalHFA is not a direct lender, our mortgage products are offered through private loan officers who have been approved & trained by our Agency. These loan officers can help you find out more about CalHFA’s programs and guide you through the homebuying process.” It then provides a link to contact an MCC-participating loan officer.

This bill would codify the current CalHFA practice of requiring CalHFA, within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide a lender or other party participating in the program with notice of the change, unless providing notice within five days would impose an undue burden on the agency.

5) Is there a problem to solve? According to the author, a member of the author’s staff was in the market to buy a house and assumed that he qualified for the MCC Tax Credit. The staff member was about to put an offer on a house with the assumption, after working with his broker, that the offer would include financing under the MCC tax credit program. When the program changed, he was left scrambling for another financing option. The author’s office asserts that the issue of informing the public of program changes of the CALHFA programs is broader than this one incident.

When buying a home, financing options and rates often change dramatically from day to day. Even if the lender had received the five days’ notice as required under this bill, it is not clear if that notice would have changed the staffers’ assumption as he searched for a house.

Assembly Votes:

Floor: 74-4

Appr: 18-2

H&CD: 6-1

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 22, 2016.)

SUPPORT:

None received

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2280

Author:(Ridley-Thomas)

As Amended Ver:April 21, 2016

Majority vote

SUMMARY: Requires the California Housing Finance Agency (CalHFA) to notify participating parties within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, unless it would impose an undue burden. Specifically, this bill:

1. Requires CalHFA, within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide a lender or other party participating in the program notice of the change unless providing that notice within five business days would impose an undue burden on the agency.
2. Authorizes the notice to be provided by a program bulletin.
3. Affects programs including, but not limited to, the California Homebuyer's Downpayment Assistance Program (CHDAP) and the Mortgage Credit Certificate Program.

FISCAL EFFECT: According to the Assembly Appropriations Committee, no state cost. CalHFA indicates that any expenses they incur will be covered within the 5% administrative allowance granted under the affected programs. Appropriations Committee staff notes that CalHFA operates independently of the state General Fund and derives the funding for its downpayment assistance program from the sale of bonds.

COMMENTS:

Established in 1975, CalHFA was chartered as the state's affordable housing bank to make below market-rate loans for single-family and multi-family housing through the sale of tax-exempt bonds. One of the larger programs that CalHFA operates is the CHDAP, which provides homebuyers between 3% and 6% in downpayment assistance secured as a second mortgage on the home. The program operates as a revolving loan and when a home is sold CalHFA is repaid allowing the funds to go to another homebuyer. There is approximately $150 million available in CHDAP at this time. The program can provide downpayments to individuals that make up to 120% of the area median income (AMI) and just recently raised its income limits to 140% of AMI in high cost areas.

Due to variable market considerations and bondholder requirements CalHFA is required to modify aspects of CHDAP and other housing programs, such as income eligibility criteria, in some cases with little warning. When time allows, CalHFA currently uses program bulletins to notify participating lenders in advance of upcoming program changes. The agency also posts the information on its Web site. The agency is in the process of creating a written policy regarding program change notifications for stakeholders. It should be noted, however, that CalHFA does not work directly with prospective homebuyers, but rather with lending institutions. Therefore, lending institutions are the primary audience for program change notifications.

Purpose of the bill: According to the author, this "bill is needed to provide certainty to potential homeowners who participate in programs like CHDAP. The bill serves these individuals by increasing their confidence in these complex programs because they can determine acquisitions costs without the fear of eligibility requirements being changed without their knowledge. If changes in a program are made after a prospective home buyer has entered into a contract to purchase a home, the bill helps those individuals secure other means of financing as soon as possible."

Analysis Prepared by: Rebecca Rabovsky / H. & C.D. / (916) 319-2085 FN: 0003065

Date of Hearing: May 25, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2280

Author:(Ridley-Thomas) – As Amended Ver:April 21, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Housing Finance Agency (CalHFA), within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide participating parties notice of the change unless providing that notice within five business days would impose an undue burden on the agency. The bill authorizes the notice to be provided by a program bulletin. The affected programs include, but are not limited to, the California Homebuyer's Downpayment Assistance Program (CHDAP) and the Mortgage Credit Certificate Program.

FISCAL EFFECT:

No state cost. CalHFA indicates that any expenses they incur will be covered within the 5% administrative allowance granted under the affected programs. Staff notes that CalHFA operates independently of the state General Fund and derives the funding for its downpayment assistance program from the sale of bonds.

COMMENTS:

1. Purpose. According to the author, this “bill is needed to provide certainty to potential homeowners who participate in programs like CHDAP. The bill serves these individuals by increasing their confidence in these complex programs because they can determine acquisitions costs without the fear of eligibility requirements being changed without their knowledge. If changes in a program are made after a prospective home buyer has entered into a contract to purchase a home, the bill helps those individuals secure other means of financing as soon as possible.”
2. Background. Established in 1975, CalHFA was chartered as the state's affordable housing bank to make below market-rate loans for single-family and multi-family housing through the sale of tax-exempt bonds. Due to variable market considerations and bondholder requirements CalHFA is required to modify aspects of CHDAP and other housing programs, such as income eligibility criteria, in some cases with little warning. When time allows, CalHFA currently uses program bulletins to notify participating lenders in advance of upcoming program changes. The agency also posts the information on its website. The agency is in the process of creating a written policy regarding program change notifications for stakeholders. It should be noted, however, that CalHFA does not work directly with prospective homebuyers, but rather with lending institutions. Therefore, lending institutions are the primary audience for program change notifications.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: May 18, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2280

Author:(Ridley-Thomas) – As Amended Ver:April 21, 2016

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Housing Finance Agency (CalHFA), within five business days of making a change to the eligibility requirements for a housing or lending program that the agency administers, to provide participating parties notice of the change unless providing that notice within five business days would impose an undue burden on the agency. The bill authorizes the notice to be provided by a program bulletin. The affected programs include, but are not limited to, the California Homebuyer's Downpayment Assistance Program (CHDAP) and the Mortgage Credit Certificate Program.

FISCAL EFFECT:

No state cost. CalHFA indicates that any expenses they incur will be covered within the 5% administrative allowance granted under the affected programs. Staff notes that CalHFA operates independently of the state General Fund and derives the funding for its downpayment assistance program from the sale of bonds.

COMMENTS:

1. Purpose. According to the author, this “bill is needed to provide certainty to potential homeowners who participate in programs like CHDAP. The bill serves these individuals by increasing their confidence in these complex programs because they can determine acquisitions costs without the fear of eligibility requirements being changed without their knowledge. If changes in a program are made after a prospective home buyer has entered into a contract to purchase a home, the bill helps those individuals secure other means of financing as soon as possible.”
2. Background. Established in 1975, CalHFA was chartered as the state's affordable housing bank to make below market-rate loans for single-family and multi-family housing through the sale of tax-exempt bonds. Due to variable market considerations and bondholder requirements CalHFA is required to modify aspects of CHDAP and other housing programs, such as income eligibility criteria, in some cases with little warning. When time allows, CalHFA currently uses program bulletins to notify participating lenders in advance of upcoming program changes. The agency also posts the information on its website. The agency is in the process of creating a written policy regarding program change notifications for stakeholders. It should be noted, however, that CalHFA does not work directly with prospective homebuyers, but rather with lending institutions. Therefore, lending institutions are the primary audience for program change notifications.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

David Chiu, Chair

ABPCA Bill Id:AB 2280 (

Author:Ridley-Thomas) – As Introduced Ver:February 18, 2016

SUBJECT: California Housing Finance Agency: program eligibility requirements: changes

SUMMARY: Prohibits the California Housing Finance Agency (CalHFA) from changing the eligibility requirements for a housing or lending program that the agency administrates without providing participating parties notice of the change prior to the change taking effect. Specifically, this bill:

1. Prohibits CalHFA from changing the eligibility requirements for a housing or lending program that the agency administers, however that program may be characterized, without providing a lender or other party participating in the program notice of the change at least five business days prior to the change taking effect.
2. Requires a notification of the change to be provided by means of a program bulletin posted on the CalHFA Internet Web site at the earliest practicable time.
3. Provides the agency may change eligibility requirements without the five-business-day notification period if the executive director makes a determination that both of the following are true:
   1. The change in eligibility is required by federal law.
   2. The agency will lose federal funding if the eligibility requirements are subject to the five-business-day notification period.
4. Provides the board of directors may change eligibility requirements by majority vote without regard to the five-business-day notification period.
5. Requires CalHFA to require, as a condition of participation in one of its housing or lending programs, its lenders or other participating parties to have protocols that provide for timely notification to their representative of changes to program eligibility requirements.

EXISTING LAW:

1. Provides that CalHFA is administered by a board of directors and is supervised on a day-to-day basis by an executive director. (Health & Safety Code 50901, 50908)
2. Provides that the primary purpose of CalHFA is to meet the housing needs of persons and families of low or moderate income. (Health & Safety Code 50950)
3. Authorizes CalHFA to make loans to housing sponsors for housing developments and to qualified mortgage lenders, among others. (Health & Safety Code 51050)

FISCAL EFFECT: Unknown

COMMENTS:

One of the larger programs that CalHFA operates is the California Homeowner Downpayment Assistance Program (CHDAP) which provides homebuyers between 3% and 6% in downpayment assistance secured as a second mortgage on the home. The program operates as a revolving loan and when a home is sold CalHFA is repaid allowing the funds to go to another homebuyer. There is approximately $150 million available in CHDAP at this time. The program can provide downpayments to individuals that make up to 120% of the area median income (AMI) and just recently raised its income limits to 140% of AMI in high cost areas. CalHFA operates independently of the state General Fund and derives the funding for its downpayment assistance program from the sale of bonds.

Due to variable market considerations and bondholder requirements CalHFA is required to modify aspects of CHDAP and other housing programs, such as income eligibility criteria, in some cases with little warning. When time allows, CalHFA currently uses program bulletins to notify participating lenders in advance of upcoming program changes. The agency also posts the information on its website. The agency is in the process of creating a written policy regarding program change notifications for stakeholders. It should be noted, however, that CalHFA does not work directly with prospective homebuyers, but rather with lending institutions. Therefore, lending institutions are the primary audience for program change notifications.

Purpose of the bill: According to the author, this “bill is needed to provide certainty to potential homeowners who participate in programs like CHDAP. The bill serves these individuals by increasing their confidence in these complex programs because they can determine acquisitions costs without the fear of eligibility requirements being changed without their knowledge. If changes in a program are made after a prospective home buyer has entered into a contract to purchase a home, the bill helps those individuals secure other means of financing as soon as possible. Also, directing the public to the agency’s website will reinforce the details of the program administered by the agency in order to foster improved comprehension of the down payment assistance process.”

Staff comments: Established in 1975, CalHFA was chartered as the state's affordable housing bank to make below market-rate loans for single-family and multi-family housing through the sale of tax-exempt bonds. CalHFA is a self-supporting entity and its debts, including those related to the compensation and retirement costs of its employees are separate from the State of California. Investor capital, through the sale of bonds, provides the agency's source of revenue, not taxpayers' proceeds. Existing statutes and bond indentures state that the agency's debts are not a debt or liability of the state or any political subdivision thereof and are not backed by the faith and credit of the State of California. The committee may wish to consider that to the extent that compliance with the proposed measure would interfere with CalHFA’s ability to effectively control risk or comply with bondholder agreements, the state’s current liability protection may be jeopardized. Proposed amendments to AB 2280 would codify CalHFA’s existing notification process while reducing the measure’s impact on CalHFA’s ability to quickly implement program changes when obligated to do so by financial or regulatory considerations.

Committee amendments:

1. On page 2, line 18 strike out “(a)”
2. On page 2, line 18, strike out “shall not” and insert “shall, within five business days of making a”
3. On page 2, line 18, after “change” insert “to”
4. On page 2, line 24, strike out “50172),” and insert “50172) of”
5. On page 2, line 24, strike out “without providing” and insert “provide”
6. On page 2, strike out line 26 and insert “change unless providing that notice within five business days would impose an undue burden on the agency.”
7. On page 2, line 27, strike out “shall” and insert “may”
8. On page 2 strike out lines 28-33, inclusive and strike out page 3

REGISTERED SUPPORT / OPPOSITION:

Support

None on File

Opposition

None on File

Analysis Prepared by: Ken Spence / H. & C.D. / (916) 319-2085, Ken Spence / H. & C.D. / (961) 319-2085