AB 218: Local agencies: airports: customer facility charges.
- Session Year: 2017-2018
- House: Assembly
- Latest Version Date: 2017-09-27
Existing law authorizes airports to require rental car companies to collect a customer facility charge under specified circumstances for purposes that include financing, designing, and constructing airport vehicle rental facilities and common-use transportation systems. Existing law specifies that the authorization for an airport to impose a customer facility charge becomes inoperative when the bonds used for financing are paid. Existing law, if a bond or other form of indebtedness is not used for financing or if a bond or other form of indebtedness used for financing has been paid, authorizes the Oakland International Airport to require a customer facility charge for a period of up to 10 years from the imposition of the charge, as specified.
This bill, until January 1, 2023, would delete the authorization pertaining to the Oakland International Airport and would delete the requirement that the general authorization for an airport to impose a customer facility charge become inoperative when the bonds are paid, except as applied to an alternative fee.
Existing law requires the customer facility charge, also referred to as a fee, to be $10 per contract, except as otherwise specified.
This bill, instead, would require that fee not to exceed $10. The bill also would prohibit an airport from requiring a rental company to collect a customer facility charge from a consumer 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.
This bill would incorporate additional changes to Section 50474.3 of the Government Code proposed by AB 1286 to be operative only if this bill and AB 1286 are enacted and this bill is enacted last.
Existing law authorizes airports to require rental car companies to collect a customer facility charge under specified circumstances for purposes that include financing, designing, and constructing airport vehicle rental facilities and common-use transportation systems. Existing law specifies that the authorization for an airport to impose a customer facility charge becomes inoperative when the bonds used for financing are paid. Existing law, if a bond or other form of indebtedness is not used for financing or if a bond or other form of indebtedness used for financing has been paid, authorizes the Oakland International Airport to require a customer facility charge for a period of up to 10 years from the imposition of the charge, as specified.
This bill, until January 1, 2023, would delete the authorization pertaining to the Oakland International Airport and would delete the requirement that the general authorization for an airport to impose a customer facility charge become inoperative when the bonds are paid, except as applied to an alternative fee.
Existing law requires the customer facility charge, also referred to as a fee, to be $10 per contract, except as otherwise specified.
This bill, instead, would require that fee not to exceed $10. The bill also would prohibit an airport from requiring a rental company to collect a customer facility charge from a consumer 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.
This bill would incorporate additional changes to Section 50474.3 of the Government Code proposed by AB 1286 to be operative only if this bill and AB 1286 are enacted and this bill is enacted last.
Existing law authorizes airports to require rental car companies to collect a customer facility charge under specified circumstances for purposes that include financing, designing, and constructing airport vehicle rental facilities and common-use transportation systems. Existing law specifies that the authorization for an airport to impose a customer facility charge becomes inoperative when the bonds used for financing are paid. Existing law, if a bond or other form of indebtedness is not used for financing or if a bond or other form of indebtedness used for financing has been paid, authorizes the Oakland International Airport to require a customer facility charge for a period of up to 10 years from the imposition of the charge, as specified.
This bill, until January 1, 2023, would delete the authorization pertaining to the Oakland International Airport and would delete the requirement that the general authorization for an airport to impose a customer facility charge become inoperative when the bonds are paid, except as applied to an alternative fee.
Existing law requires the customer facility charge, also referred to as a fee, to be $10 per contract, except as otherwise specified.
This bill, instead, would require that fee not to exceed $10. The bill also would prohibit an airport from requiring a rental company to collect a customer facility charge from a consumer 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.
This bill would incorporate additional changes to Section 50474.3 of the Government Code proposed by AB 1286 to be operative only if this bill and AB 1286 are enacted and this bill is enacted last.
Existing law authorizes airports to require rental car companies to collect a customer facility charge under specified circumstances for purposes that include financing, designing, and constructing airport vehicle rental facilities and common-use transportation systems. Existing law specifies that the authorization for an airport to impose a customer facility charge becomes inoperative when the bonds used for financing are paid. Existing law, if a bond or other form of indebtedness is not used for financing or if a bond or other form of indebtedness used for financing has been paid, authorizes the Oakland International Airport to require a customer facility charge for a period of up to 10 years from the imposition of the charge, as specified.
This bill, until January 1, 2023, would delete the authorization pertaining to the Oakland International Airport, Airport and would delete the requirement that the general authorization for an airport to impose a customer facility charge become inoperative when the bonds are paid, and would make conforming changes. except as applied to an alternative fee.
Existing law requires the customer facility charge, also referred to as a fee, to be $10 per contract, except as otherwise specified.
This bill, instead, would require that fee not to exceed $10. The bill also would prohibit an airport from requiring a rental company to collect a customer facility charge from a consumer 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.
Existing law authorizes airports to require rental car companies to collect a customer facility charge under specified circumstances for purposes that include financing, designing, and constructing airport vehicle rental facilities and common-use transportation systems. Existing law specifies that the authorization for an airport to impose a customer facility charge becomes inoperative when the bonds used for financing are paid. Existing law, if a bond or other form of indebtedness is not used for financing or if a bond or other form of indebtedness used for financing has been paid, authorizes the Oakland International Airport to require a customer facility charge for a period of up to 10 years from the imposition of the charge, as specified.
This bill bill, until January 1, 2023, would delete the authorization pertaining to the Oakland International Airport, and would delete the requirement that the general authorization for an airport to impose a customer facility charge become inoperative when the bonds are paid. The bill also paid, and would make conforming changes.
Existing law requires the customer facility charge, also referred to as a fee, to be $10 per contract, except as otherwise specified.
This bill, instead, would require that fee not to exceed $10. The bill also would prohibit an airport from requiring a rental company to collect a customer facility charge from a consumer 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.
Existing law authorizes airports to require rental car companies to collect a customer facility charge under specified circumstances for purposes that include financing, designing, and constructing airport vehicle rental facilities and common-use transportation systems. Existing law specifies that the authorization for an airport to impose a customer facility charge becomes inoperative when the bonds used for financing are paid. Existing law, if a bond or other form of indebtedness is not used for financing or if a bond or other form of indebtedness used for financing has been paid, authorizes the Oakland International Airport to require a customer facility charge for a period of up to 10 years from the imposition of the charge, as specified.
This bill would delete the authorization pertaining to the Oakland International Airport, and would delete the requirement that the general authorization for an airport to impose a customer facility charge become inoperative when the bonds are paid. The bill also would make conforming changes.
(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 2.Section 50474.21 is added to the Government Code, to read:50474.21.(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)Except as provided in subdivision (d), the authorization given pursuant to this article for an airport to impose a customer facility charge shall become inoperative when the bonds used for financing are paid.
(d)If a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, this article.
(e)This section shall become operative on January 1, 2023.
SEC. 3.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 3.5.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2025. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 4.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
SEC. 4.5.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIII D of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2025. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
SEC. 5.Sections 3.5 and 4.5 of this bill incorporate amendments to Section 50474.3 of the Government Code proposed by both this bill and Assembly Bill 1286. Those sections shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 50474.3 of the Government Code, and (3) this bill is enacted after Assembly Bill 1286, in which case Sections 3 and 4 of this bill shall not become operative.
(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 2.Section 50474.21 is added to the Government Code, to read:50474.21.(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)Except as provided in subdivision (d), the authorization given pursuant to this article for an airport to impose a customer facility charge shall become inoperative when the bonds used for financing are paid.
(d)If a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, this article.
(e)This section shall become operative on January 1, 2023.
SEC. 3.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 3.5.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2025. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 4.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
SEC. 4.5.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIII D of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2025. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
SEC. 5.Sections 3.5 and 4.5 of this bill incorporate amendments to Section 50474.3 of the Government Code proposed by both this bill and Assembly Bill 1286. Those sections shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 50474.3 of the Government Code, and (3) this bill is enacted after Assembly Bill 1286, in which case Sections 3 and 4 of this bill shall not become operative.
(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 2.Section 50474.21 is added to the Government Code, to read:50474.21.(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)Except as provided in subdivision (d), the authorization given pursuant to this article for an airport to impose a customer facility charge shall become inoperative when the bonds used for financing are paid.
(d)If a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, this article.
(e)This section shall become operative on January 1, 2023.
SEC. 3.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 3.5.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(8)(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. 2025. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 4.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
SEC. 4.5.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIII D of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2025. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
SEC. 5.Sections 3.5 and 4.5 of this bill incorporate amendments to Section 50474.3 of the Government Code proposed by both this bill and Assembly Bill 1286. Those sections shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2018, (2) each bill amends Section 50474.3 of the Government Code, and (3) this bill is enacted after Assembly Bill 1286, in which case Sections 3 and 4 of this bill shall not become operative.
(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 2.Section 50474.21 is added to the Government Code, to read:50474.21.(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)Except as provided in subdivision (d), the authorization given pursuant to this article for an airport to impose a customer facility charge shall become inoperative when the bonds used for financing are paid.
(d)If a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, this article.
(e)This section shall become operative on January 1, 2023.
SEC. 3.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 4.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 2.Section 50474.21 is added to the Government Code, to read:50474.21.(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)Except as provided in subdivision (d), the authorization given pursuant to this article for an airport to impose a customer facility charge shall become inoperative when the bonds used for financing are paid.
(d)If a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, this article.
(e)This section shall become operative on January 1, 2023.
SEC. 2.SEC. 3.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(8)(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall remain in effect only until January 1, 2023, and as of that date is repealed.
SEC. 4.Section 50474.3 is added to the Government Code, to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be in an amount not to exceed ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be in an amount not to exceed ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)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.
(9)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to this subdivision, the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
(d)This section shall become operative on January 1, 2023.
(a)For purposes of this article, customer facility charge means 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:
(1)To finance, design, and construct consolidated airport vehicle rental facilities.
(2)To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
(3)To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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.
(b)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, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including whether the airports actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airports revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies 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 airports Internet Web site. In the case of a customer facility charge for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network pursuant to paragraph (1) of subdivision (a). Any audit required by this subdivision may be included as a part of an audit of an airports finances.
(c)Except as provided in subdivision (d), the authorization given pursuant to this article for an airport to impose a customer facility charge shall become inoperative when the bonds used for financing are paid.(d)If a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, this article.SEC. 2.Section 50474.3 of the Government Code is amended to read:50474.3.(a)A customer facility charge may be collected by a rental company under the following circumstances:
(1)Collection of the fee by the rental company is required by an airport operated by a city, a county, a city and county, a joint powers authority, a special district, or the San Diego County Regional Airport Authority formed pursuant to Division 17 (commencing with Section 170000) of the Public Utilities Code.
(2)The fee is calculated on a per contract basis or as provided in subdivision (b).
(3)The fee is a user fee, not a tax imposed upon real property or an incident of property ownership under Article XIIID of the California Constitution.
(4)Except as otherwise provided in paragraph (5), the fee shall be ten dollars ($10) per contract or the amount provided in subdivision (b).
(5)The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies. If the fee imposed by the airport is for both a consolidated rental vehicle facility and a common-use transportation system, the fee collected from customers of on-airport rental vehicle companies shall be ten dollars ($10) or the amount provided in subdivision (b), but the fee imposed on customers of off-airport rental vehicle companies who are transported on the common-use transportation system is only that amount that is proportionate to the costs of the common-use transportation system. The fee is uniformly applied to each class of on-airport or off-airport customers, provided that the airport requires off-airport customers to use the common-use transportation system. For purposes of this paragraph, on-airport rental vehicle company means a rental company operating under an airport property lease or an airport concession or license agreement whose customers use or will use the consolidated rental vehicle facility and the fee as to those customers is a user fee described in paragraph (3).
(6)Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose.
(7)The fee is separately identified on the rental agreement.
(8)This subdivision does not apply to fees which are governed by Section 50474.1 or Section 57.5 of the San Diego Unified Port District Act (Chapter 67 of the First Extraordinary Session of the Statutes of 1962).
(b)Any airport may require rental companies to collect an alternative customer facility charge, as defined in Section 50474.21, under the following conditions:
(1)The airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2) to review the costs of financing the design and construction of a consolidated rental vehicle facility and the design, construction, and operation of any common-use transportation system in which all of the following occur:
(A)The airport establishes the amount of revenue necessary to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and to design, construct, and operate any common-use transportation system, or acquire vehicles for use in that system, based on evidence presented during the hearing.
(B)The airport finds, based on evidence presented during the hearing, that the fee authorized in subdivision (a) will not generate sufficient revenue to finance the reasonable costs of designing and constructing a consolidated rental vehicle facility and of designing, constructing, and operating any common-use transportation system, or acquire vehicles for use in that system.
(C)The airport finds that the reasonable cost of the project requires the additional amount of revenue that would be generated by the proposed daily rate, including any rate increase, authorized pursuant to this paragraph.
(D)The airport outlines each of the following:
(i)Steps it has taken to limit costs.
(ii)Other potential alternatives for meeting its revenue needs other than the collection of the fee.
(iii)The extent to which rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers.
(2)The airport may not require the fee authorized in this subdivision to be collected at any time that the fee authorized in subdivision (a) is being collected.
(3)Pursuant to the procedure set forth in this subdivision, the fee may be collected at a rate charged on a per-day basis subject to the following conditions:
(A)Commencing January 1, 2011, the amount of the fee may not exceed six dollars ($6) per day.
(B)Commencing January 1, 2014, the amount of the fee may not exceed seven dollars and fifty cents ($7.50) per day.
(C)Commencing January 1, 2017, and thereafter, the amount of the fee may not exceed nine dollars ($9) per day.
(D)At no time shall the fee authorized in this paragraph be collected from any customer for more than five days for each individual rental vehicle contract.
(E)An airport subject to this paragraph shall initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21.
(4)For any airport seeking to require rental companies to collect an alternative customer facility charge pursuant to this subdivision the following provisions apply:
(A)The airport shall provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
(i)The total amount of the customer facility charge collected.
(ii)How the funds are being spent.
(iii)The amount of and reason for any changes in the airports budget or financial needs for the facility or common-use transportation system.
(B)(i)The airport shall complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the customer facility charge. Copies 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 airports Internet Web site.
(ii)Prior to any increase pursuant to subdivision (b), the airport shall update the information provided in the initial collection audit completed pursuant to clause (i). Copies of the updated 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 airports Internet Web site.
(iii)An audit shall be completed every three years after initial collection if the customer facility charge is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system pursuant to paragraph (2) of subdivision (a) of Section 50474.21. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. This obligation shall continue until the fee authorization becomes inoperative pursuant to subdivision (c) of Section 50474.21. The information reported pursuant to this clause shall be compiled into one document, 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 airports Internet Web site accessible to the public. The information reported shall be contained within one easily accessible page contained within the airports Internet Web site.
(iv)This section shall not be construed to require an airport to audit a common-use transportation system not financed by a customer facility charge and used for the purposes permitted pursuant to paragraph (2) of subdivision (a) of Section 50474.21.
(v)The airport shall post on the airports Internet Web site copies of the completed audits required by this subparagraph for a period of six years following the audits completion.
(C)Use of proceeds of any bonds backed by alternative customer facility charges shall be limited to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified in Section 50474.21.
(c)Notwithstanding any other provision of law, including, but not limited to, Part 1 (commencing with Section 6001) to Part 1.7 (commencing with Section 7280), inclusive, of Division 2 of the Revenue and Taxation Code, the fees collected pursuant to this section, or another law whereby a local agency operating an airport requires a rental car company to collect a facility financing fee from its customers, are not subject to sales, use, or transaction taxes.
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Date
|
Status
|
|---|---|
| Sep 27, 2017 | Chaptered by Secretary of State - Chapter 311, Statutes of 2017. |
| Sep 27, 2017 | Approved by the Governor. |
| Sep 12, 2017 | Enrolled and presented to the Governor at 2:30 p.m. |
| Sep 5, 2017 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 77. Noes 0.). |
| Aug 31, 2017 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 2 pursuant to Assembly Rule 77. |
| Aug 31, 2017 | Read third time. Passed. Ordered to the Assembly. |
| Jul 10, 2017 | Read second time. Ordered to third reading. |
| Jul 6, 2017 | Read third time and amended. Ordered to second reading. |
| Jul 3, 2017 | From Consent Calendar. |
| Jun 27, 2017 | Read second time and amended. Ordered to consent calendar. |
| Jun 26, 2017 | From committee: Amend, and do pass as amended. To Consent Calendar. (Ayes 7. Noes 0.) (June 20). |
| May 10, 2017 | Referred to Com. on JUD. |
| Mar 30, 2017 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Mar 30, 2017 | Read third time. Passed. Ordered to the Senate. (Ayes 74. Noes 0. Page 840.) |
| Mar 21, 2017 | Read second time. Ordered to third reading. |
| Mar 20, 2017 | Read second time and amended. Ordered returned to second reading. |
| Mar 16, 2017 | From committee: Amend, and do pass as amended. (Ayes 11. Noes 0.) (March 14). |
| Feb 6, 2017 | Referred to Com. on JUD. |
| Jan 26, 2017 | From printer. May be heard in committee February 25. |
| Jan 25, 2017 | Read first time. To print. |
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Date
|
Description
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Location
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Votes
|
|
|---|---|---|---|---|
| Sep 5, 2017 | AB 218 BONTA Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 31, 2017 | Assembly 3rd Reading AB218 Bonta By Allen | Senate Floor |
Passed |
|
| Jun 20, 2017 | Do pass as amended, and be ordered to the Consent Calendar | Senate Standing Committee on Judiciary |
Passed |
|
| Mar 30, 2017 | AB 218 BONTA Assembly Third Reading | Assembly Floor |
Passed |
|
| Mar 14, 2017 | Do pass as amended. | Assembly Standing Committee on Judiciary |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 319-2334 | ** Against | Mar 12, 2017 |
| Bay Area Council | ** Support | Jul 10, 2017 |
| California Airports Council | ** Support | Jul 10, 2017 |
| City Of Oakland | ** Support | Jul 10, 2017 |
| East Bay Economic Development Alliance | ** Support | Jul 10, 2017 |
| Enterprise Holdings | ** Support | Jul 10, 2017 |
| JUD. | ** Against | Mar 12, 2017 |
| larry e. reid, oakland city council president | ** Support | Jul 3, 2017 |
| Oakland Chamber of Commerce | ** Support | Jul 10, 2017 |
| oakland city council president, larry e. reid | ** Support | Jul 10, 2017 |
| Oakland International Airport | * Support | Mar 14, 2017 |
| Port Of Oakland | ** Support | Jul 10, 2017 |
| visit oakland | ** Support | Jul 10, 2017 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 218
Author:(Bonta)
As Amended Ver:July 6, 2017
Majority vote
ASSEMBLY: | 74-0 | (March 30, 2017) | SENATE: | 39-0 | (August 31, 2017) |
Original Committee Reference: JUD.
SUMMARY: Authorizes airports, until January 1, 2023, to collect customer facility charges from car rental customers to finance permitted improvement to airport car rental facilities, as provided, without using bonds or incurring other forms of indebtedness. Specifically, this bill:
- Repeals, until January 1, 2023, provisions specifying that the general authorization for an airport to impose a customer facility charge (CFC) become inoperative when the bonds used for financing the facility are paid.
- Repeals, until January 1, 2023, provisions authorizing Oakland International Airport, notwithstanding 1) above, to require collection of a CFC for a period of up to 10 years even if a bond or other form of indebtedness is not used for financing or has been paid.
- Establishes that existing law requiring indebtedness as a condition of being authorized to impose CFCs will once again become operative on or after January 1, 2023, unless a later enacted statute, enacted before January 1, 2023, deletes or extends that date. This sunset date does not apply to 4) and 5) below.
- Provides that the amount of the CFC that is charged per vehicle rental contract (currently required to be $10) shall be charged instead at an amount not to exceed $10 per contract.
- Clarifies that an airport shall not require a car rental company to collect a CFC from a consumer if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental.
- Makes other technical and conforming changes.
The Senate amendments resolve a potential chaptering problem with AB 1286 (Friedman) of the current legislative session, also dealing with airport customer facility charges.
FISCAL EFFECT: None
COMMENTS: Under existing law, California airports are authorized to collect a customer facility charge (CFC) from airport car rental customers for the purpose of financing, designing, and constructing consolidated airport vehicle rental facilities and to operate common-use transportation systems between airport terminals and these vehicle rental facilities. This authority expires, however, "when the bonds used for financing are paid" (Government Code Section 50474.21(c). All further references are to this Code), which effectively requires airports to incur debt, usually in the form of bonds, and remain in debt in order to retain their authority to collect CFCs.
According to the author, this requirement of indebtedness does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing, even when such improvements do not require large initial outlays by airports to finance these projects. The author states:
The requirement that airports incur debt related to modest improvements at rental car facilities adds an unnecessary and significant cost to finance the bond issuance and amortize the debt, especially for small and medium airports. Furthermore, the customer and the rental car companies do not receive any benefits from the use of the CFC payments for debt retirement. The debt requirement also diverts funds and resources that would be better spent directly benefiting the customers that use rental car facilities at the airport.
Background on airport car rental facilities and CFCs. In the 1990s, airports in California were experiencing a period of growth and several of them began to take steps to relocate on-site rental car operations away from airport terminals in order to free up that valuable real estate for improvements and other uses. Instead, airports increasingly sought to build consolidated vehicle rental facilities that housed all the car rental companies in a single off-site location farther away from the terminals. To transport rental car customers between the airport and the consolidated vehicle rental facility, some airports also constructed and operated shuttle bus transportation systems.
In 1998, the Legislature enacted SB 1907 (Burton), Chapter 889, Statutes of 1998, which for the first time allowed rental car companies to impose a separate surcharge, not included in the base rate of renting the car, for use of the transportation system that moves passengers between the terminal and the airport rental car facilities, and for financing parking structures. The authority was limited to the San Francisco and San Diego airports, however. In 2001, the Legislature enacted a more general authorizing statute, allowing other airports to impose a $10 CFC to finance, design, construct, or operate a consolidated rental car facility, or both a consolidated rental car facility and a common-use transportation system. That legislation, AB 491 (Frommer), Chapter 661, Statutes of 2001, made the fee collection authority inoperative when the bonds used for financing are paid (hereafter "the indebtedness condition"), rather than expiring the authority after 20 years or capping the aggregate amount that could be collected. Under existing law, CFC revenue continues to be 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.
In 2010, the Legislature enacted SB 1192 (Oropeza), Chapter 642, Statutes of 2010, which revised the CFC fee structure in response to some airports reporting that the existing $10 per contract fee was inadequate to fund various proposed consolidated rental car facilities. SB 1192 for the first time permitted airports to calculate and impose an alternative CFC according to a fee structure prescribed by law that allowed stepwise increases in the maximum allowable fee effective in 2011, 2014, and 2017. Before an airport can impose the alternative CFC it must also conduct a publicly noticed hearing, pursuant to the Brown Act, in which it can establish and justify the amount of revenue necessary to finance the improvements it wishes to make. As of January 1, 2017, current law allows airports employing the alternative fee structure to charge up to $9 per day, for a maximum of five days per rental contract, for a total of up to $45 over the length of such a contract.
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.
Removal of the indebtedness requirement: balancing the desire for flexibility in financing and consumer protection. Authority for the Oakland Airport to impose the CFC without indebtedness is set to expire at the end of 2018, ten years after it was granted that special authority pursuant to AB 2142 (Swanson), Chapter 228, Statutes of 2008. This bill seeks to delete the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid, and also would delete the expiring authorization pertaining to the Oakland International Airport — an individual exception to the general rule that would no longer be necessary if every airport in the state were authorized to impose CFCs without the limitation of the indebtedness.
The bill imposes a five-year sunset date to make the deletion of these two provisions temporary, allowing the Legislature to reevaluate operation of the law after a five-year trial period. If this bill is enacted, the statute providing underlying authority to charge CFCs will operate for five years (until January 1, 2023) without the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid, and without the expiring authorization pertaining to the Oakland International Airport. Unless the statute is renewed or extended before the sunset date, the indebtedness condition and the 10 year exception for Oakland will be restored to Section 50474.21 on January 1, 2023.
Supporters of the bill, including the California Airports Council (CAC), representing the 33 commercial airports in the state, contend that the indebtedness requirement is too inflexible and would prefer to operate on "a pay as you go" basis instead. CAC states:
This limitation has required airport to acquire bonds or other forms of indebtedness to enable the use of CFCs for infrastructure projects. In some cases, airports have had to delay the commencement of a capital infrastructure project if the project cost was insufficient to validate issuance of bonds. AB 218 would offer flexibility for airports, allowing them to pursue lower cost capital improvement to consolidated rental car facilities on a "pay as you go" basis rather than requiring debt. Larger airports are complex structures, with multi-million dollar updates and improvements occurring annually. Providing increased flexibility for financing will allow airports to complete projects in a timely and efficient manner, benefitting both passengers and the local economy.
As discussed earlier, legislative history of AB 491 (Frommer), which enacted the current language that makes authority to collect the CFC "inoperative when the bonds used for financing are paid," indicates that the Legislature wanted to impose a temporary limitation on the collection of CFCs and did not want to authorize it as a type of fee that could be collected forever. The idea behind the indebtedness condition is clear: when the financing for a vehicle rental facility is paid off (i.e. there is no indebtedness), then the airport no longer needs to use the fee to pay off the bonds or other debt on the facility, and thus the legislative authority for collecting the fee ceases by operation of law. At its heart, the condition is intended to protect consumers by limiting the collection of the fee for a period of time and for certain purposes.
Proponents contend that consumers will continue to be sufficiently protected by other aspects of the existing statute, namely the limitations on what purposes the fee may be used for, and provisions that limit the aggregate amount of CFCs to be collected to an amount that shall not exceed the reasonable costs to finance, design and construct facilities, as determined by an independent auditor. (Section 5074.21 (b).) Proponents further contend that the rigorous auditing requirements for CFCs and the increased transparency and accountability requirements for alternative CFCs that were established by SB 1192 will also protect against airports abusing their authority to impermissibly collect or spend CFCs.
A brief review by Judiciary Committee staff of the detailed audit reports regularly provided by the airports of Oakland, San Diego, San Jose, and Burbank-Glendale-Pasadena suggest that airports are acting responsibly in using the fees they are collecting. Nevertheless, because the authority to collect CFCs without the indebtedness requirement has never before applied generally to airports across California, the author proposes to amend the bill to incorporate a five-year sunset date in the interest of ensuring legislative oversight and consumer protection.
In addition to the five year sunset date, the bill makes two changes to existing law affecting collection of CFCs that are not subject to the 2023 sunset date. First, the bill allows an airport to charge a CFC pursuant to Section 50474.3 (a) "in an amount not to exceed $10" instead of the rigid $10 amount set forth by existing law. Currently airports that do not wish to charge the alternative per-day CFC under Section 50474.3 (b) can only charge $10 and not any lower amount. This change t is intended to provide a small additional amount of flexibility to airports that may want to charge less than the full $10 amount as may be suggested by their audit figures (although it is expected that will be the exception rather than the rule among airports that are already legally charging $10 per contract.) Second, the bill clarifies that in no circumstance may an airport require a rental car company to collect a CFC twice from the same consumer for a single rental transaction. This consumer protection amendment, combined with the imposition of a sunset date, was sufficient to remove the opposition of several rental car companies to the earlier version of the bill. Recent technical amendments to the bill add language to avoid a chaptering problem with AB 1286 (Friedman).
Analysis Prepared by: Anthony Lew / JUD. / (916) 319-2334 FN: 0001133 FN:
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 218
Amended: 7/6/17 in Senate
SENATE JUDICIARY COMMITTEE: 7-0, 6/20/17
AYES: Jackson, Moorlach, Anderson, Hertzberg, Monning, Stern, Wieckowski
ASSEMBLY FLOOR: 74-0, 3/30/17 - See last page for vote
SUBJECT: Local agencies: airports: customer facility charges
DIGEST:
This bill removes the provision that provides that authorization to impose customer facility charges (CFC) becomes inoperative when the bonds used for financing are paid. This bill also removes a provision granting Oakland International Airport the ability to impose a CFC without any form of indebtedness or after such a form is paid. On January 1, 2023, the relevant statutes will revert back to current law. This bill also provides that a per-contract CFC, or “traditional CFC,” shall not exceed $10 and that an airport shall not require a rental company to collect more than one CFC for a single rental. These latter changes are permanent. This bill contains language to avoid chaptering out issues in the event AB 1286 (Friedman, 2017) is also enacted.
Senate Floor Amendments of 7/6/17 add language to avoid chaptering out issues arising from changes made to Section 50474.3 of the Government Code by both AB 1286 and this bill.
Existing law:
- Defines “customer facility charge” to mean 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 vehicle rental facilities;
- To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system;
- To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a CFC shall not otherwise be 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. (Gov. Code Sec. 50474.21(a).)
- Permits a CFC to be collected by a rental company under the following circumstances:
- An authorized airport requires the rental company to collect the fee;
- The fee is calculated on a per contract basis or as an alternative-CFC, as specified;
- The fee is a user fee, not a tax;
- The fee shall be $10 per contract, with limited exception, including when charged as an alternative-CFC;
- The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies;
- Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose; and
- The fee is separately identified on the rental agreement. (Gov. Code Sec. 50474.3(a).)
- Provides that the aggregate amount to be collected through a CFC must not exceed the reasonable costs, as determined by an audit by an independent auditor paid for by the airport, to finance, design, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the CFC, including whether the airport’s actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airport’s revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies of the audit are required to be provided to the Assembly and Senate Committees on Judiciary, the Assembly Committee on Transportation, and the Senate Committee on Transportation and Housing, and to be posted on the airport’s Internet Web site. In the case of a CFC for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network, as specified. Any audit required by this subdivision may be included as a part of an audit of an airport’s finances. (Gov. Code Sec. 50474.21(b).)
- Limits the use of proceeds of any bonds backed by alternative-CFCs to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified. CFCs are not subject to sales, use, or transaction taxes. (Gov. Code Sec. 50474.3.)
- Provides that authorization for an airport to impose a CFC or an alternative-CFC becomes inoperative when the bonds used for financing are paid. (Gov. Code Secs. 50474.21(c), 50474.3(b)(3)(E).)\
- Provides that if a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, the law. (Gov. Code Sec. 50474.21(d).)
This bill:
- Deletes the section of the law that provides that authorization for an airport to impose a traditional CFC becomes inoperative when the bonds used for financing are paid. It also removes the provision specifically applying to Oakland International Airport’s use of a CFC without any form of indebtedness. This bill provides for a sunset on these changes on January 1, 2023. At that point, the law reverts back to its current form.
- Provides that any airport that obtains the authority to require or increase an alternative-CFC shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
- Provides that a traditional CFC shall be in an amount not to exceed $10. This bill also provides that an airport shall not require a rental company to collect a CFC from a consumer if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental.
- Contains alternative language that harmonizes the changes made to Section 50474.3 of the Government Code by both this bill and AB 1286 (Friedman, 2017) that will take effect in the event both bills are passed.
Background
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.
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, including an alternative-CFC, is eliminated. The only exception was created by AB 2142 (Swanson, Chapter 228, Statutes of 2008). AB 2142 authorized the Oakland International Airport to assess and collect a CFC for a period of up to 10 years from the imposition of the charge even if a bond or other form of indebtedness is not used for financing, or if some form of indebtedness has been paid.
This bill removes the provisions that provide for the expiration of the authority to impose a CFC when the bonds used for financing the relevant project are paid. To ensure this does not affect the operation of alternative-CFCs, language is inserted into the alternative-CFC provisions. These changes sunset in 2023, and the law reverts back to its current form. This bill clarifies that an airport can charge a traditional CFC in an amount not to exceed $10 and that no airport can require a rental company to charge more than one CFC per car rental.
NOTE: See the Senate Judiciary Committee analysis for a detailed background of this bill.
Comments
The author writes:
The requirement that airports incur debt related to modest improvements at rental car facilities adds an unnecessary and significant cost to finance the bond issuance and amortize the debt, especially for small and medium airports. Such requirement does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing. Furthermore, the debt requirement also diverts funds and resources that would be better spent directly benefiting the customers that use rental car facilities.
In 2008, AB 2142 (Swanson) removed indebtedness as a requirement to collect CFCs for a period of 10 years for the Oakland International Airport. That authority expires at the end of next year. In order for the Oakland International Airport to accomplish their planned projects at the vehicle rental facility, the airport needs the flexibility to pay for those projects through a financial instrument of its own choosing, and then reimburse itself using CFCs.
Like all California’s airports, the Oakland International Airport continues to recover from the devastating effects of the Great Recession. Ensuring that OAK, and other airports can continue to fund these smaller, yet crucial improvements to their common-use facilities, without the burden imposed by incurring debt, will undoubtedly help them in this recovery.
Changing the structure of the CFC-scheme
The expiration of the authority to charge a CFC upon the payment of the bonds used to finance the relevant project has been central to the CFC scheme. The specific provision was placed into the statute in 2001 by AB 491 (Frommer, Chapter 661, Statutes of 2001). This provision made sense because the purpose of the CFCs was to finance specific projects. Once the projects were paid for, the authority would expire since the basis for the authority no longer existed. This provision also provided an end point for any specific CFC so that it could not last into perpetuity once initiated.
The same provision was placed into the authority to impose alternative-CFCs. These heftier fees were authorized for larger projects that could not be covered by the traditional CFC. These projects were more likely to require extensive financing given their size. The provision therefore made logical sense and again provided an end point for specific authorizations.
This bill removes the requirement that any traditional CFC-funded projects involve some sort of bond financing. Airports could impose a CFC in order to pay for an authorized project as it was undertaken without taking on any debt. The sponsor, the Port of Oakland writes, “The debt requirement adds an unnecessary and significant cost to airports like [Oakland International Airport], and diverts funds that could otherwise be used to benefit rental car customers at the airport.” Oakland currently has this power through an authority granted by AB 2142. The authority to charge a CFC thereunder expires ten years after the CFC is imposed.
The arguments in support of this bill focus on the flexibility needed to fund “modest projects.” The author writes that the bond “requirement does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing.”
The justification for requesting these changes supports removing the indebtedness requirement from the traditional CFC for the next five years. For smaller projects, an airport is not required to take on debt and increase costs. Consumers still have the protection that these charges will not exceed $10 per rental, and the sunset date ensures the Legislature can reassess the scheme if necessary.
To ensure that the changes do not inadvertently affect the alternative-CFC scheme, this bill imports the language from Section 50474.21(c) of the Government Code into the provisions governing alternative-CFCs, specifically Section 50474.3(b)(3)(E). Currently, the alternative-CFC provisions cross-reference to Section 50474.21(c), which will be removed by this bill.
Additional changes
This bill also makes two other changes that do not sunset. First, this bill provides that a traditional CFC can be in an amount not to exceed $10. This likely clarifies existing law, but does ensure that an airport can charge a CFC at a lower level if appropriate. This change ensures that airports can ease the per rental burden on consumers by only imposing that level necessary for the relevant project. This bill also provides that an airport shall not require a rental company to collect a CFC from a consumer pursuant to this article if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental. This change ensures that a consumer is not burdened by CFCs being piled on for the same rental. This is a common-sense change that further protects consumers.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Port of Oakland (source)
Bay Area Council
California Airports Council
City of Oakland
East Bay Economic Development Alliance
Enterprise Holdings
Oakland Chamber of Commerce
Oakland City Council President, Larry E. Reid
Visit Oakland
None received
ARGUMENTS IN SUPPORT: The California Airports Council writes in support, “In some cases, airports have had to delay the commencement of a capital infrastructure project if the project cost was insufficient to validate issuance of bonds. AB 218 would offer flexibility for airports, allowing them to pursue lower cost capital improvement to [consolidated airport car rental facilities] on a ‘pay as you go’ basis rather than requiring debt.”
ASSEMBLY FLOOR: 74-0, 3/30/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Voepel, Waldron, Weber, Wood
NO VOTE RECORDED: Dababneh, Frazier, Medina, Quirk, Ting, Rendon
Prepared by: Christian Kurpiewski / JUD. / (916) 651-4113
7/10/17 11:28:38
**** END ****
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 218
:
SENATE JUDICIARY COMMITTEE: 7-0, 6/20/17
AYES: Jackson, Moorlach, Anderson, Hertzberg, Monning, Stern, Wieckowski
ASSEMBLY FLOOR: 74-0, 3/30/17 - See last page for vote
DIGEST:
This bill removes the provision that provides that authorization to impose customer facility charges (CFC) becomes inoperative when the bonds used for financing are paid. This bill also removes a provision granting Oakland International Airport the ability to impose a CFC without any form of indebtedness or after such a form is paid. On January 1, 2023, the relevant statutes will revert back to current law. This bill also provides that a per-contract CFC, or “traditional CFC,” shall not exceed $10 and that an airport shall not require a rental company to collect more than one CFC for a single rental. These latter changes are permanent.
Existing law:
- Defines “customer facility charge” to mean 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 vehicle rental facilities;
- To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system;
- To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a CFC shall not otherwise be 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. (Gov. Code Sec. 50474.21(a).)
- Permits a CFC to be collected by a rental company under the following circumstances:
- An authorized airport requires the rental company to collect the fee;
- The fee is calculated on a per contract basis or as an alternative-CFC, as specified;
- The fee is a user fee, not a tax;
- The fee shall be $10 per contract, with limited exception, including when charged as an alternative-CFC;
- The fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies;
- Revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose; and
- The fee is separately identified on the rental agreement. (Gov. Code Sec. 50474.3(a).)
- Provides that the aggregate amount to be collected through a CFC must not exceed the reasonable costs, as determined by an audit by an independent auditor paid for by the airport, to finance, design, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the CFC, including whether the airport’s actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airport’s revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies of the audit are required to be provided to the Assembly and Senate Committees on Judiciary, the Assembly Committee on Transportation, and the Senate Committee on Transportation and Housing, and to be posted on the airport’s Internet Web site. In the case of a CFC for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network, as specified. Any audit required by this subdivision may be included as a part of an audit of an airport’s finances. (Gov. Code Sec. 50474.21(b).)
- Limits the use of proceeds of any bonds backed by alternative-CFCs to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified. CFCs are not subject to sales, use, or transaction taxes. (Gov. Code Sec. 50474.3.)
- Provides that authorization for an airport to impose a CFC or an alternative-CFC becomes inoperative when the bonds used for financing are paid. (Gov. Code Secs. 50474.21(c), 50474.3(b)(3)(E).)\
- Provides that if a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, the law. (Gov. Code Sec. 50474.21(d).)
This bill:
- Deletes the section of the law that provides that authorization for an airport to impose a traditional CFC becomes inoperative when the bonds used for financing are paid. It also removes the provision specifically applying to Oakland International Airport’s use of a CFC without any form of indebtedness. This bill provides for a sunset on these changes on January 1, 2023. At that point, the law reverts back to its current form.
- Provides that any airport that obtains the authority to require or increase an alternative-CFC shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
- Provides that a traditional CFC shall be in an amount not to exceed $10. This bill also provides that an airport shall not require a rental company to collect a CFC from a consumer if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental.
Background
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.
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, including an alternative-CFC, is eliminated. The only exception was created by AB 2142 (Swanson, Chapter 228, Statutes of 2008). AB 2142 authorized the Oakland International Airport to assess and collect a CFC for a period of up to 10 years from the imposition of the charge even if a bond or other form of indebtedness is not used for financing, or if some form of indebtedness has been paid.
This bill removes the provisions that provide for the expiration of the authority to impose a CFC when the bonds used for financing the relevant project are paid. To ensure this does not affect the operation of alternative-CFCs, language is inserted into the alternative-CFC provisions. These changes sunset in 2023, and the law reverts back to its current form. This bill clarifies that an airport can charge a traditional CFC in an amount not to exceed $10 and that no airport can require a rental company to charge more than one CFC per car rental.
NOTE: See the Senate Judiciary Committee analysis for a detailed background of this bill.
Comments
The author writes:
The requirement that airports incur debt related to modest improvements at rental car facilities adds an unnecessary and significant cost to finance the bond issuance and amortize the debt, especially for small and medium airports. Such requirement does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing. Furthermore, the debt requirement also diverts funds and resources that would be better spent directly benefiting the customers that use rental car facilities.
In 2008, AB 2142 (Swanson) removed indebtedness as a requirement to collect CFCs for a period of 10 years for the Oakland International Airport. That authority expires at the end of next year. In order for the Oakland International Airport to accomplish their planned projects at the vehicle rental facility, the airport needs the flexibility to pay for those projects through a financial instrument of its own choosing, and then reimburse itself using CFCs.
Like all California’s airports, the Oakland International Airport continues to recover from the devastating effects of the Great Recession. Ensuring that OAK, and other airports can continue to fund these smaller, yet crucial improvements to their common-use facilities, without the burden imposed by incurring debt, will undoubtedly help them in this recovery.
Changing the structure of the CFC-scheme
The expiration of the authority to charge a CFC upon the payment of the bonds used to finance the relevant project has been central to the CFC scheme. The specific provision was placed into the statute in 2001 by AB 491 (Frommer, Chapter 661, Statutes of 2001). This provision made sense because the purpose of the CFCs was to finance specific projects. Once the projects were paid for, the authority would expire since the basis for the authority no longer existed. This provision also provided an end point for any specific CFC so that it could not last into perpetuity once initiated.
The same provision was placed into the authority to impose alternative-CFCs. These heftier fees were authorized for larger projects that could not be covered by the traditional CFC. These projects were more likely to require extensive financing given their size. The provision therefore made logical sense and again provided an end point for specific authorizations.
This bill removes the requirement that any traditional CFC-funded projects involve some sort of bond financing. Airports could impose a CFC in order to pay for an authorized project as it was undertaken without taking on any debt. The sponsor, the Port of Oakland writes, “The debt requirement adds an unnecessary and significant cost to airports like [Oakland International Airport], and diverts funds that could otherwise be used to benefit rental car customers at the airport.”
Oakland currently has this power through a special authority granted by AB 2142. The authority to charge a CFC thereunder expires ten years after the CFC is imposed.
The arguments in support of this bill focus on the flexibility needed to fund “modest projects.” The author writes that the bond “requirement does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing.”
The justification and proffered basis for requesting these changes support removing the indebtedness requirement from the traditional CFC for the next five years. For smaller projects, an airport is not required to take on debt and increase costs. Consumers still have the protection that these charges will not exceed $10 per rental, and the sunset date ensures the Legislature can reassess the scheme if necessary.
To ensure that the changes do not inadvertently affect the alternative-CFC scheme, this bill imports the language from Section 50474.21(c) of the Government Code into the provisions governing alternative-CFCs, specifically Section 50474.3(b)(3)(E). Currently, the alternative-CFC provisions cross-reference to Section 50474.21(c), which will be removed by this bill.
Additional changes
This bill also makes two other changes that do not sunset. First, this bill provides that a traditional CFC can be in an amount not to exceed $10. This likely clarifies existing law, but does ensure that an airport can charge a CFC at a lower level if appropriate. This change ensures that airports can ease the per rental burden on consumers by only imposing that level necessary for the relevant project.
This bill also provides that an airport shall not require a rental company to collect a CFC from a consumer pursuant to this article if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental. This change ensures that a consumer is not burdened by CFCs being piled on for the same rental. This is a common-sense change that further protects consumers.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Port of Oakland (source)
Bay Area Council
California Airports Council
City of Oakland
East Bay Economic Development Alliance
Enterprise Holdings
Larry E. Reid, Oakland City Council President
Oakland Chamber of Commerce
Visit Oakland
OPPOSITION: (Verified 6/26/17)
None received
ARGUMENTS IN SUPPORT: The California Airports Council writes in support, “In some cases, airports have had to delay the commencement of a capital infrastructure project if the project cost was insufficient to validate issuance of bonds. AB 218 would offer flexibility for airports, allowing them to pursue lower cost capital improvement to [consolidated airport car rental facilities] on a ‘pay as you go’ basis rather than requiring debt.”
ASSEMBLY FLOOR: 74-0, 3/30/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Voepel, Waldron, Weber, Wood
NO VOTE RECORDED: Dababneh, Frazier, Medina, Quirk, Ting, Rendon
Prepared by: Christian Kurpiewski / JUD. / (916) 651-4113
7/3/17 13:45:50
**** END ****
Senator Hannah-Beth Jackson, Chair
2017-2018 Regular Session
Bill No: AB 218 (Author:Bonta)
Version: March 20, 2017
Hearing Date: June 20, 2017
Fiscal: No
Urgency: No
Consultant: CK
SUBJECT
Local agencies: airports: customer facility charges
DESCRIPTION
This bill would remove the provision that provides that authorization to impose customer facility charges (CFC) becomes inoperative when the bonds used for financing are paid.[1] It would also remove a provision granting Oakland International Airport the ability to impose a CFC without any form of indebtedness or after such a form is paid. On January 1, 2023, the relevant statutes would revert back to current law. This bill would also provide that a per-contract CFC, or “traditional CFC,” shall not exceed ten dollars ($10) and that an airport shall not require a rental company to collect more than one CFC for a single rental. These latter changes would be permanent.
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 CFCs began in California in the late 1990s when the Legislature enacted two bills, SB 1907 (Burton, Ch. 889, Stats. 1998) and SB 1228 (Vasconcellos, Ch. 760, Stats. 1999), which permitted San Diego, San Francisco, and San Jose airports to collect fees to finance consolidated rental facilities and associated transportation systems. The latter bill specifically authorized a CFC 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. The alternative-CFC fee structure allowed an airport to charge a daily fee for up to five days for each individual rental car contract. The maximum daily fee started at $6 per day and increased according to a statutory schedule. As of January 1, 2017, the amount of the daily fee that can be charged rose to $9 per day for a maximum of five days per rental contract for a maximum charge of $45 to apply thereafter.
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.
Last year AB 2280 (Ridley-Thomas, Ch. 414, Stats. 2016) and AB 2051 (O’Donnell, Ch. 183, Stats. 2016) made changes to these laws. AB 2280 expanded, for the Los Angeles International Airport, the types of debts that may be repaid with CFC revenue and increased the range of allowable uses to which CFC revenue could be directed. These changes were requested and granted in anticipation of Los Angeles’ bid to host the Olympics. AB 2051 recast and reorganized the laws 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 those provisions.
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, including an alternative-CFC, is eliminated. The only exception was created by AB 2142 (Swanson, Ch. 228, Stats. 2008). AB 2142 authorized the Oakland International Airport to assess and collect a CFC for a period of up to ten years from the imposition of the charge even if a bond or other form of indebtedness is not used for financing, or if some form of indebtedness has been paid.
This bill would remove the provisions that provide for the expiration of the authority to impose a CFC when the bonds used for financing the relevant project are paid. To ensure this does not affect the operation of alternative-CFCs, language would be inserted into the alternative-CFC provisions. These changes would sunset in 2023, and the law would revert back to its current form. This bill would also clarify that an airport could charge a traditional CFC in an amount not to exceed ten dollars ($10) and that no airport could require a rental company to charge more than one CFC in connection with the same car rental.
CHANGES TO EXISTING LAW
Existing law defines “customer facility charge” (CFC) to mean 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 vehicle rental facilities;
- to finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system;
- to finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise be 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. (Gov. Code Sec. 50474.21(a).)
Existing law permits a CFC to be collected by a rental company under the following circumstances:
- an authorized airport requires the rental company to collect the fee;
- the fee is calculated on a per contract basis or as an alternative-CFC, as specified;
- the fee is a user fee, not a tax;
- the fee shall be ten dollars ($10) per contract, with limited exception, including when charged as an alternative-CFC;
- the fee for a consolidated rental vehicle facility shall be collected only from customers of on-airport rental vehicle companies;
- revenues collected from the fee do not exceed the reasonable costs of financing, designing, and constructing the facility and financing, designing, constructing, and operating any common-use transportation system, or acquiring vehicles for use in that system, and are not used for any other purpose; and
- the fee is separately identified on the rental agreement. (Gov. Code Sec. 50474.3(a).)
Existing law provides that the aggregate amount to be collected through a CFC must not exceed the reasonable costs, as determined by an audit by an independent auditor paid for by the airport, to finance, design, and construct those facilities. The auditor shall independently examine and substantiate the necessity for, and the amount of, the CFC, including whether the airport’s actual or projected costs are supported and justified, any steps the airport may take to limit costs, potential alternatives for meeting the airport’s revenue needs other than the collection of the fee, and whether and to what extent rental companies or other businesses or individuals using the facility or common-use transportation system may pay for the costs associated with these facilities and systems apart from the fee from rental customers, or whether the airport did not comply with any provision of this section. Copies of the audit are required to be provided to the Assembly and Senate Committees on Judiciary, the Assembly Committee on Transportation, and the Senate Committee on Transportation and Housing, and to be posted on the airport’s Internet Web site. In the case of a CFC for a common-use transportation system, the audit shall also consider the reasonable costs of providing the transit system or busing network, as specified. Any audit required by this subdivision may be included as a part of an audit of an airport’s finances. (Gov. Code Sec. 50474.21(b).)
Existing law permits any airport to require rental companies to collect an alternative-CFC to finance projects, as specified above, under the following conditions:
- the airport first conducts a publicly noticed hearing pursuant to the Ralph M. Brown Act to review the costs of financing the projects in which the airport establishes, through evidence presented, the amount of revenue necessary to finance the reasonable costs of the project and that such revenue can only be generated by a daily rate through an alternative-CFC rather than a traditional CFC. The airport must also outline at the hearing the steps taken to limit costs, potential alternatives for meeting its revenue needs, the extent to which other entities or persons will pay for the costs, rental companies or other businesses or individuals using the facility or common-use transportation system will pay for the costs associated with these facilities and systems apart from the fee collected from rental customers;
- the alternative-CFC can be charged on a per-day basis for a maximum of five days per rental contract, but must not exceed nine dollars ($9) per day (as of January 1, 2017) and cannot be required if a traditional-CFC is also required; and
- the airport must initiate the process for obtaining the authority to require or increase the alternative fee no later than January 1, 2018. (Gov. Code Sec. 50474.3(b).)
Existing law requires an airport collecting an alternative-CFC to provide reports on an annual basis to the Senate and Assembly Committees on Judiciary detailing all of the following:
- the total amount of the alternative-CFC collected;
- how the funds are being spent;
- the amount of and reason for any changes in the airport’s budget or financial needs for the facility or common-use transportation system. (Gov. Code Sec. 50474.3(b)(4)(A).)
Existing law requires an airport collecting an alternative-CFC, or seeking to increase such a fee, to complete an independent audit as required by subdivision (b) of Section 50474.21 prior to the initial collection of the alternative-CFC, to provide copies to the Assembly and Senate Committees on Judiciary, the Assembly Committee on Transportation, and the Senate Committee on Transportation and Housing, and to post it on its Internet Web site for six years. Audits shall be completed every three years after initial collection if the alternative-CFC is collected for the purpose of operating a common-use transportation system or to acquire vehicles for use in the system. A regularly conducted audit of airport finances that includes the customer facility charge information, that satisfies the requirements of subdivision (b) of Section 50474.21, and is produced in accordance with the generally accepted accounting principles of the Government Accounting Standards Board, shall satisfy the requirements of this clause. (Gov. Code Sec. 50474.3(b)(4)(B).)
Existing law limits the use of proceeds of any bonds backed by alternative-CFCs to construction and design of the consolidated rental vehicle facility, terminal modifications, and operating costs of the common-use transportation system, as specified. CFCs are not subject to sales, use, or transaction taxes. (Gov. Code Sec. 50474.3.)
Existing law provides that authorization for an airport to impose a CFC or an alternative-CFC becomes inoperative when the bonds used for financing are paid. (Gov. Code Secs. 50474.21(c), 50474.3(b)(3)(E).)
Existing law provides that if a bond or other form of indebtedness is not used for financing, or a 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 for the purposes allowed by, and subject to the conditions imposed by, the law. (Gov. Code Sec. 50474.21(d).)
This bill would delete the section of the law that provides that authorization for an airport to impose a traditional CFC becomes inoperative when the bonds used for financing are paid. It would also remove the provision specifically applying to Oakland International Airport’s use of a CFC without any form of indebtedness. This bill would provide for a sunset on these changes on January 1, 2023. At that point, this bill would have the law revert back to its current form.
This bill would provide that any airport that obtains the authority to require or increase an alternative-CFC shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
This bill would provide that a traditional CFC shall be in an amount not to exceed ten dollars ($10). This bill would also provide that an airport shall not require a rental company to collect a CFC from a consumer if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental.
COMMENT
1. Stated need for the bill
According to the author:
The requirement that airports incur debt related to modest improvements at rental car facilities adds an unnecessary and significant cost to finance the bond issuance and amortize the debt, especially for small and medium airports. Such requirement does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing. Furthermore, the debt requirement also diverts funds and resources that would be better spent directly benefiting the customers that use rental car facilities.
In 2008, AB 2142 (Swanson) removed indebtedness as a requirement to collect CFCs for a period of 10 years for the Oakland International Airport. That authority expires at the end of next year. In order for the Oakland International Airport to accomplish their planned projects at the vehicle rental facility, the airport needs the flexibility to pay for those projects through a financial instrument of its own choosing, and then reimburse itself using CFCs.
Like all California’s airports, the Oakland International Airport continues to recover from the devastating effects of the Great Recession. Ensuring that OAK, and other airports can continue to fund these smaller, yet crucial improvements to their common-use facilities, without the burden imposed by incurring debt, will undoubtedly help them in this recovery.
2. Changing the structure of the CFC-scheme
The expiration of the authority to charge a CFC upon the payment of the bonds used to finance the relevant project has been central to the CFC scheme. The specific provision was placed into the statute in 2001 by AB 491 (Frommer, Ch. 661, Stats. 2001). This provision made sense because the purpose of the CFCs was to finance specific projects. Once the projects were paid for, the authority would expire since the basis for the authority no longer existed. This provision also provided an end point for any specific CFC so that it could not last into perpetuity once initiated.
The same provision was placed into the authority to impose alternative-CFCs. These heftier fees were authorized for larger projects that could not be covered by the traditional CFC. These projects were more likely to require extensive financing given their size. The provision therefore made logical sense and again provided an end point for specific authorizations.
This bill would remove the requirement that any traditional CFC-funded projects involve some sort of bond financing. Airports could impose a CFC in order to pay for an authorized project as it was undertaken without taking on any debt. The sponsor, the Port of Oakland writes: “The debt requirement adds an unnecessary and significant cost to airports like [Oakland International Airport], and diverts funds that could otherwise be used to benefit rental car customers at the airport.”
Oakland currently has this power through a special authority granted by AB 2142 (Swanson, Ch. 228, Stats. 2008). The authority to charge a CFC thereunder expires ten years after the CFC is imposed.
The arguments in support of this bill focus on the flexibility needed to fund “modest projects.” The California Airports Council writes in support: “In some cases, airports have had to delay the commencement of a capital infrastructure project if the project cost was insufficient to validate issuance of bonds. AB 218 would offer flexibility for airports, allowing them to pursue lower cost capital improvement to [consolidated airport car rental facilities] on a ‘pay as you go’ basis rather than requiring debt.” The author writes that the bond “requirement does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing.”
The justification and proffered basis for requesting these changes support removing the indebtedness requirement from the traditional CFC for the next five years. For smaller projects, an airport would not be required to take on debt and increase costs. Consumers would still have the protection that these charges would not exceed $10 per rental, and the sunset date ensures the Legislature can reassess the scheme if necessary.
To ensure that the changes do not inadvertently affect the alternative-CFC scheme, this bill would import the language from Section 50474.21(c) of the Government Code into the provisions governing alternative-CFCs, specifically Section 50474.3(b)(3)(E). Currently, the alternative-CFC provisions cross-reference to Section 50474.21(c), which will be removed by this bill.
3. Additional changes
This bill would also make two other changes that do not sunset. First, this bill would provide that a traditional CFC can be in an amount not to exceed ten dollars. This likely clarifies existing law, but does ensure that an airport can charge a CFC at a lower level if appropriate. This change would ensure that airports can ease the per rental burden on consumers by only imposing that level necessary for the relevant project.
This bill would also provide that 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. This change would ensure that a consumer is not burdened by CFCs being piled on for the same rental. This is a common-sense change that further protects consumers.
4. Committee amendment
The author has agreed to take the following amendment:
On page 7, line 15 after “January 1, 2018.” insert:
Any airport that obtains the authority to require or increase an alternative fee shall be authorized to continue collecting that fee until the fee authorization becomes inoperative when the bonds used for financing are paid.
Support: Bay Area Council; California Airports Council; City of Oakland; East Bay Economic Development Alliance; Enterprise Holdings; Oakland Chamber of Commerce; Larry E. Reid, Oakland City Council President; Visit Oakland
Opposition: None Known
HISTORY
Source: Port of Oakland
Related Pending Legislation: AB 1286 (Friedman, 2017) would extend the date by which an airport must initiate the process for obtaining the authority to require or increase an alternative customer facility charge for authorized purposes from January 1, 2018, to January 1, 2025. This bill is currently in the Senate Judiciary Committee.
Prior Legislation:
AB 2280 (Ridley-Thomas, Ch. 414, Stats. 2016) See Background.
AB 2051 (O’Donnell, Ch. 183, Stats. 2016) See Background.
AB 359 (Holden, Ch. 549, Stats. 2013) See Background.
SB 1006 (Senate Budget and Fiscal Review Committee, Ch. 32, Stats. 2012) See Background.
SB 1192 (Oropeza, Ch. 642, Stats. 2010) See Background.
AB 2142 (Swanson, Ch. 228, Stats. 2008) 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.
SB 1907 (Burton, Ch. 889, Stats. 1998) See Background.
Prior Vote:
Assembly Floor (Ayes 74, Noes 0)
Assembly Judiciary Committee (Ayes 11, Noes 0)
**************
This analysis reflects the amendment to be taken in Committee. As it currently reads, the bill would affect the operation of the alternative-CFC system. The amendment would make clear that this bill is not intended to, and does not in operation, affect alternative-CFCs. ↑
ASSEMBLY THIRD READING
ATR Bill Id:AB 218
Author:(Bonta)
As Amended Ver:March 20, 2017
Majority vote
Committee | Votes | Ayes | Noes |
Judiciary | 11-0 | Mark Stone, Cunningham, Chau, Chiu, Cristina Garcia, Holden, Kalra, Kiley, Maienschein, Reyes, Ting |
|
SUMMARY: Authorizes airports, until January 1, 2023, to collect customer facility charges from car rental customers to finance permitted improvement to airport car rental facilities, as provided, without using bonds or incurring other forms of indebtedness. Specifically, this bill:
- Repeals, until January 1, 2023, provisions specifying that the general authorization for an airport to impose a customer facility charge (CFC) become inoperative when the bonds used for financing the facility are paid.
- Repeals, until January 1, 2023, provisions authorizing Oakland International Airport, notwithstanding 1) above, to require collection of a CFC for a period of up to ten years even if a bond or other form of indebtedness is not used for financing or has been paid.
- Establishes that existing law requiring indebtedness as a condition of being authorized to impose CFCs will once again become operative on or after January 1, 2023, unless a later enacted statute, enacted before January 1, 2023, deletes or extends that date. This sunset date does not apply to 4) and 5) below.
- Provides that the amount of the CFC that is charged per vehicle rental contract (currently required to be $10) shall be charged instead at an amount not to exceed $10 per contract.
- Clarifies that an airport shall not require a car rental company to collect a CFC from a consumer if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental.
- Makes other technical and conforming changes.
FISCAL EFFECT: None
COMMENTS: Under existing law, California airports are authorized to collect a customer facility charge (CFC) from airport car rental customers for the purpose of financing, designing, and constructing consolidated airport vehicle rental facilities and to operate common-use transportation systems between airport terminals and these vehicle rental facilities. This authority expires, however, "when the bonds used for financing are paid" (Government Code Section 50474.21(c). All further references are to this Code), which effectively requires airports to incur debt, usually in the form of bonds, and remain in debt in order to retain their authority to collect CFCs.
According to the author, this requirement of indebtedness does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing, even when such improvements do not require large initial outlays by airports to finance these projects. The author states:
The requirement that airports incur debt related to modest improvements at rental car facilities adds an unnecessary and significant cost to finance the bond issuance and amortize the debt, especially for small and medium airports. Furthermore, the customer and the rental car companies do not receive any benefits from the use of the CFC payments for debt retirement. The debt requirement also diverts funds and resources that would be better spent directly benefiting the customers that use rental car facilities at the airport.
Background on airport car rental facilities and CFCs. In the 1990s, airports in California were experiencing a period of growth and several of them began to take steps to relocate on-site rental car operations away from airport terminals in order to free up that valuable real estate for improvements and other uses. Instead, airports increasingly sought to build consolidated vehicle rental facilities that housed all the car rental companies in a single off-site location farther away from the terminals. To transport rental car customers between the airport and the consolidated vehicle rental facility, some airports also constructed and operated shuttle bus transportation systems.
In 1998, the Legislature enacted SB 1907 (Burton), Chapter 889, Statutes of. 1998, which for the first time allowed rental car companies to impose a separate surcharge, not included in the base rate of renting the car, for use of the transportation system that moves passengers between the terminal and the airport rental car facilities, and for financing parking structures. The authority was limited to the San Francisco and San Diego airports, however. In 2001, the Legislature enacted a more general authorizing statute, allowing other airports to impose a $10 CFC to finance, design, construct, or operate a consolidated rental car facility, or both a consolidated rental car facility and a common-use transportation system. That legislation, AB 491 (Frommer), Chapter 661, Statutes of 2001, made the fee collection authority inoperative when the bonds used for financing are paid (hereafter "the indebtedness condition"), rather than expiring the authority after 20 years or capping the aggregate amount that could be collected. Under existing law, CFC revenue continues to be 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.
In 2010, the Legislature enacted SB 1192 (Oropeza), Chapter 642, Statutes of 2010, which revised the CFC fee structure in response to some airports reporting that the existing $10 per contract fee was inadequate to fund various proposed consolidated rental car facilities. SB 1192 for the first time permitted airports to calculate and impose an alternative CFC according to a fee structure prescribed by law that allowed stepwise increases in the maximum allowable fee effective in 2011, 2014, and 2017. Before an airport can impose the alternative CFC it must also conduct a publicly noticed hearing, pursuant to the Brown Act, in which it can establish and justify the amount of revenue necessary to finance the improvements it wishes to make. As of January 1, 2017, current law allows airports employing the alternative fee structure to charge up to $9 per day, for a maximum of five days per rental contract, for a total of up to $45 over the length of such a contract.
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.
Removal of the indebtedness requirement: balancing the desire for flexibility in financing and consumer protection. Authority for the Oakland Airport to impose the CFC without indebtedness is set to expire at the end of 2018, ten years after it was granted that special authority pursuant to AB 2142 (Swanson), Chapter 228, Statutes of 2008. This bill seeks to delete the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid, and also would delete the expiring authorization pertaining to the Oakland International Airport—an individual exception to the general rule that would no longer be necessary if every airport in the state were authorized to impose CFCs without the limitation of the indebtedness.
Recent amendments to the bill impose a five-year sunset date to make the deletion of these two provisions temporary, allowing the Legislature to reevaluate operation of the law after a five-year trial period. If this bill is enacted, the statute providing underlying authority to charge CFCs will operate for five years (until January 1, 2023) without the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid, and without the expiring authorization pertaining to the Oakland International Airport. Unless the statute is renewed or extended before the sunset date, the indebtedness condition and the 10 year exception for Oakland will be restored to Section 50474.21 on January 1, 2023.
Supporters of the bill, including the California Airports Council (CAC), representing the 33 commercial airports in the state, contend that the indebtedness requirement is too inflexible and would prefer to operate on "a pay as you go" basis instead. CAC states:
This limitation has required airport to acquire bonds or other forms of indebtedness to enable the use of CFCs for infrastructure projects. In some cases, airports have had to delay the commencement of a capital infrastructure project if the project cost was insufficient to validate issuance of bonds. AB 218 would offer flexibility for airports, allowing them to pursue lower cost capital improvement to consolidated rental car facilities on a "pay as you go" basis rather than requiring debt. Larger airports are complex structures, with multi-million dollar updates and improvements occurring annually. Providing increased flexibility for financing will allow airports to complete projects in a timely and efficient manner, benefitting both passengers and the local economy.
As discussed earlier, legislative history of AB 491 (Frommer), which enacted the current language that makes authority to collect the CFC "inoperative when the bonds used for financing are paid," indicates that the Legislature wanted to impose a temporary limitation on the collection of CFCs and did not want to authorize it as a type of fee that could be collected forever. The idea behind the indebtedness condition is clear: when the financing for a vehicle rental facility is paid off (i.e. there is no indebtedness), then the airport no longer needs to use the fee to pay off the bonds or other debt on the facility, and thus the legislative authority for collecting the fee ceases by operation of law. At its heart, the condition is intended to protect consumers by limiting the collection of the fee for a period of time and for certain purposes.
Proponents contend that consumers will continue to be sufficiently protected by other aspects of the existing statute, namely the limitations on what purposes the fee may be used for, and provisions that limit the aggregate amount of CFCs to be collected to an amount that shall not exceed the reasonable costs to finance, design and construct facilities, as determined by an independent auditor. (Section 5074.21 (b).) Proponents further contend that the rigorous auditing requirements for CFCs and the increased transparency and accountability requirements for alternative CFCs that were established by SB 1192 will also protect against airports abusing their authority to impermissibly collect or spend CFCs.
A brief review by Judiciary Committee staff of the detailed audit reports regularly provided by the airports of Oakland, San Diego, San Jose, and Burbank-Glendale-Pasadena suggest that airports are acting responsibly in using the fees they are collecting. Nevertheless, because the authority to collect CFCs without the indebtedness requirement has never before applied generally to airports across California, the author proposes to amend the bill to incorporate a five-year sunset date in the interest of ensuring legislative oversight and consumer protection.
Additional recent amendments affecting collection of the CFC. In addition to the five year sunset date, the bill makes two changes to existing law affecting collection of CFCs that are not subject to the 2023 sunset date. First, the bill allows an airport to charge a CFC pursuant to Section 50474.3 (a) "in an amount not to exceed $10" instead of the rigid $10 amount set forth by existing law. Currently airports that do not wish to charge the alternative per-day CFC under Section 50474.3 (b) can only charge $10 and not any lower amount. This change t is intended to provide a small additional amount of flexibility to airports that may want to charge less than the full $10 amount as may be suggested by their audit figures (although it is expected that will be the exception rather than the rule among airports that are already legally charging $10 per contract.) Second, the bill clarifies that in no circumstance may an airport require a rental car company to collect a CFC twice from the same consumer for a single rental transaction. This consumer protection amendment, combined with the imposition of a sunset date, was sufficient to remove the opposition of several rental car companies to the earlier version of the bill.
Analysis Prepared by: Anthony Lew / JUD. / (916) 319-2334 FN: 0000041
Date of Hearing: March 14, 2017
ASSEMBLY COMMITTEE ON
, Chair
ABPCA Bill Id:
Author:(Bonta) – As Ver:
As Proposed to be Amended
SUBJECT:
KEY ISSUES:
- Should airports be authorized, for the first time since customer facility fees were allowed by statute, to collect such fees to finance improvements to their car rental facilities without the requirement of issuing bonds or incurRing indebtedness?
- in the interest of consumer protection and in order to allow the legislature an opportunity to evaluate this important shift in policy, should this authority to collect facility fees without indebtedness be granted only for a period of five years, subject to a 2023 sunset date?
SYNOPSIS
Existing law authorizes California airports to collect a customer facility charge (CFC) from airport car rental customers for the purpose of financing, designing, and constructing consolidated airport vehicle rental facilities, and to operate common-use transportation systems between airport terminals and these vehicle rental facilities. Under Gov. Code Section 50474.21, however, this authority expires "when the bonds used for financing are paid"-- a condition which effectively requires airports to incur debt, usually in the form of bonds, and to remain in debt in order to retain their authority to collect CFCs. According to the author, this requirement of indebtedness does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing, even when such improvements do not require large initial outlays to finance.
This bill, sponsored by the Port of Oakland (operators of Oakland International airport), seeks to delete the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid. It would also delete an individual 10 year-long exception to the general authorization rule that has allowed Oakland Airport to collect CFCs since 2008 without having to incur debt as most other airports have to do. (The Oakland exception may be deleted under this bill because it would no longer be necessary if every airport in the state were also authorized to impose CFCs without the limitation of the indebtedness.) The bill is strongly supported by the California Airports Council (CAC), whose member airports would also like the freedom to finance improvements to their consolidated rental car facilities on a "pay as you go" basis rather than being required to incur debt.
Recognizing the need to balance consumer protection concerns with a desire to provide greater funding flexibility to airports, the author proposes to amend the bill to incorporate a 5-year sunset date. This decision is especially prudent given that the authority to collect CFCs without the indebtedness requirement has only been granted on a case-by-case basis and has never before applied generally to airports across California. Thus the sunset date allows continued legislative oversight over CFC policy. As a result of the sunset date and deletion of the indebtedness requirement, the bill’s provisions shall be piloted on a test basis for the next five years, allowing airports to operate free of that requirement during that time, but then restored to the statute in 2023 unless a later enacted statute renews or extends that date. Additional proposed amendments by the author would allow airports to charge the CFC in an amount less than $10, and would clarify that airports may not require a CFC to be charged more than once to the same consumer in connection with a single car rental transaction. Although Enterprise Holdings, on behalf of three car rental agencies, registered an oppose-unless-amended position to the bill, at the time of this analysis it is thought that the proposed author's amendments will completely address their concerns, in which case they would no longer be in opposition to the bill. There is no other registered opposition to this bill.
SUMMARY: Authorizes airports, until January 1, 2023, to collect customer facility charges from car rental customers to finance permitted improvement to airport car rental facilities, as provided, without using bonds or incurring other forms of indebtedness. Specifically, this bill:
- Repeals, until January 1, 2023, provisions specifying that the general authorization for an airport to impose a customer facility charge (CFC) become inoperative when the bonds used for financing the facility are paid.
- Repeals, until January 1, 2023, provisions authorizing Oakland International Airport, notwithstanding 1) above, to require collection of a CFC for a period of up to ten years even if a bond or other form of indebtedness is not used for financing or has been paid.
- Establishes that existing law requiring indebtedness as a condition of being authorized to impose CFCs will once again become operative on or after January 1, 2023, unless a later enacted statute, enacted before January 1, 2023, deletes or extends that date. This sunset date does not apply to 4) and 5) below.
- Provides that the amount of the CFC that is charged per vehicle rental contract (currently required to be $10) shall be charged instead at an amount not to exceed $10 per contract.
- Clarifies that an airport shall not require a car rental company to collect a CFC from a consumer if that requirement would result in the rental company collecting more than one CFC from that consumer in connection with a single rental.
- Makes other technical and conforming changes.
EXISTING LAW:
- Authorizes a company that rents passenger vehicles to the public to collect a customer facility charge (CFC), as required by an airport, under specified circumstances. (Government Code Section 50474.3 (a). All further references are to this code unless otherwise stated.)
- Authorizes the CFC to be collected for the following purposes:
- To finance, design, and construct consolidated airport vehicle rental facilities.
- To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system.
- To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems, but not to pay for terminal expansion, gate expansion, runway expansion, or other specified changes. (Section 50474.21 (a).)
- Provides that the CFC may be assessed at ten dollars ($10) per vehicle rental contract, or, alternatively, may be charged on a per-day basis in an amount determined by a specified fee schedule, which, commencing January 1, 2017, limits the fee to no more than nine dollars ($9) per day. Further specifies a public hearing process that the airport must conduct in order to gain authorization to charge the alternative CFC on a per-day basis, rather than the $10 per-contract based fee. (Section 50474.3 (b).)
- Prohibits the aggregate amount to be collected from exceeding the reasonable costs, as determined by an audit by an independent auditor paid for by the airport, to finance, design, and construct those facilities. Further provides that the auditor shall independently examine and substantiate the necessity for, and the amount of, the customer facility charge, including, among other things, whether the airport’s actual or projected costs are supported and justified, any steps the airport may take to limit costs, and potential alternatives for meeting the airport’s revenue needs other than the collection of the fee. (Section 50474.21(b).)
- Provides that, except as specified below in 6), authorization for an airport to impose a CFC shall become inoperative when the bonds used for financing these facilities are paid. (Section 50474.21 (c).)
- Permits the Oakland International Airport to require the collection of a CFC for a period of up to 10 years from the imposition of the charge, subject to certain conditions, if a bond or other form of indebtedness is not used for financing or has been paid. (Section 50474.21 (d).)
- Requires an independent audit to be conducted, in the case of the per-contract CFC or the alternative per-day CFC, and the results to be provided to the Legislature, as specified, and posted on the airport's public web site. (Section 50474.21 (b); Section 50474.3 (b)(4).)
FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.
COMMENTS: Under existing law, California airports are authorized to collect a customer facility charge (CFC) from airport car rental customers for the purpose of financing, designing, and constructing consolidated airport vehicle rental facilities and to operate common-use transportation systems between airport terminals and these vehicle rental facilities. This authority expires, however, "when the bonds used for financing are paid" (quoting Gov. Code Section 50474.21 (c)), which effectively requires airports to incur debt, usually in the form of bonds, and remain in debt in order to retain their authority to collect CFCs.
According to the author, this requirement of indebtedness does not provide sufficient flexibility to airports who may wish to fund modest improvements for rental car facilities without debt financing, even when such improvements do not require large initial outlays by airports to finance these projects. The author states:
The requirement that airports incur debt related to modest improvements at rental car facilities adds an unnecessary and significant cost to finance the bond issuance and amortize the debt, especially for small and medium airports. Furthermore, the customer and the rental car companies do not receive any benefits from the use of the CFC payments for debt retirement. The debt requirement also diverts funds and resources that would be better spent directly benefiting the customers that use rental car facilities at the airport.
Background on airport car rental facilities and CFCs. In the 1990s, airports in California were experiencing a period of growth and several of them began to take steps to relocate on-site rental car operations away from airport terminals in order to free up that valuable real estate for improvements and other uses. Instead, airports increasingly sought to build consolidated vehicle rental facilities that housed all the car rental companies in a single off-site location farther away from the terminals. To transport rental car customers between the airport and the consolidated vehicle rental facility, some airports also constructed and operated shuttle bus transportation systems.
In 1998, the Legislature enacted SB 1907, Ch. 889, Stats. 1998, which for the first time allowed rental car companies to impose a separate surcharge, not included in the base rate of renting the car, for use of the transportation system that moves passengers between the terminal and the airport rental car facilities, and for financing parking structures. The authority was limited to the San Francisco and San Diego airports, however. The following year, the San Jose International Airport became the third airport in the state to be authorized to collect customer facility charges to finance and construct consolidated rental car facilities and common-use transportation systems with enactment of SB 1228, Ch. 760, Stats.1999. SB 1228 provided for several restrictions on the fee, including (a) capping the amount at $10.15 per rental contract; (b) preventing its collection until the facility was constructed, occupied, and open for service; (c) limiting authority to collect the fee to 20 years; and (d) capping the total amount of fees that could be collected.
In 2001, the Legislature enacted a more general authorizing statute, allowing other airports to impose a $10 CFC to finance, design, construct, or operate a consolidated rental car facility, or both a consolidated rental car facility and a common-use transportation system. That legislation, AB 491, Ch. 661, Stats. 2001, took a different approach to controlling the fee, and instead made the fee collection authority inoperative when the bonds used for financing are paid (hereafter "the indebtedness condition"), rather than expiring the authority after 20 years or capping the aggregate amount that could be collected. Under existing law, CFC revenue continues to be 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.
In 2008, AB 2142 (Swanson), as introduced, would have (a) expanded the permitted purposes of the CFC to include “maintaining” the consolidated rental vehicle facility; (b) repealed the requirement for an audit; and (c) modified the indebtedness provision. Amendments taken in this Committee restored the original purpose without including facility maintenance, continued the audit requirement, and preserved the indebtedness requirement—except that Oakland Airport was given authority to charge the fee for a period of 10 years without incurring indebtedness. The bill was later chaptered into law (Ch. 228, Stats. 2008).
In 2010, the Legislature enacted SB 1192, Ch. 642, Stats. 2010, which revised the CFC fee structure in response to some airports reporting that the existing $10 per contract fee was inadequate to fund various proposed consolidated rental car facilities. SB 1192 for the first time permitted airports to calculate and impose an alternative CFC according to a fee structure prescribed by law that allowed stepwise increases in the maximum allowable fee effective in 2011, 2014, and 2017. Before an airport can impose the alternative CFC it must also conduct a publicly noticed hearing, pursuant to the Brown Act, in which it can establish and justify the amount of revenue necessary to finance the improvements it wishes to make.
As of January 1, 2017, current law allows airports employing the alternative fee structure to charge up to $9 per day, for a maximum of five days per rental contract, for a total of up to $45 over the length of such a contract. 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. To illustrate the type of information that is contained in the audits sent to the Legislature each year, the data reported by the Oakland Airport for the fiscal years 2012-2015 is shown below:
FY 2012-13
Total CFCs collected: $5,389,790
Total Disbursements eligible for Reimbursement by CFCs: $5,158,701
CFC cumulative surplus revenue since 2002: $3,618,766
FY 2013-14
Total CFCs collected: $5,335,748
Total Disbursements eligible for Reimbursement by CFCs: $3,847,282
CFC cumulative surplus revenue since 2002: $5,015,910
FY 2014-15
Total CFCs collected: $5,967,990
Total Disbursements eligible for Reimbursement by CFCs: $4,175,762
CFC cumulative surplus revenue since 2002: $6,717,306
Note: Over 99% of Oakland's disbursements eligible for reimbursement by CFC went to contracting for shuttle bus operations.
Removal of the indebtedness requirement: balancing the desire for flexibility in financing and consumer protection. Authority for the Oakland Airport to impose the CFC without indebtedness is set to expire at the end of 2018, ten years after it was granted that special authority pursuant to AB 2142 (Swanson) of 2008. As currently in print, this bill seeks to delete the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid, and also would delete the expiring authorization pertaining to the Oakland International Airport—an individual exception to the general rule that would no longer be necessary if every airport in the state were authorized to impose CFCs without the limitation of the indebtedness.
Supporters of the bill, including the California Airports Council (CAC), representing the 33 commercial airports in the state, contend that the indebtedness requirement is too inflexible and would prefer to operate on "a pay as you go" basis instead. CAC states:
This limitation has required airport to acquire bonds or other forms of indebtedness to enable the use of CFCs for infrastructure projects. In some cases, airports have had to delay the commencement of a capital infrastructure project if the project cost was insufficient to validate issuance of bonds. AB 218 would offer flexibility for airports, allowing them to pursue lower cost capital improvement to consolidated rental car facilities on a "pay as you go" basis rather than requiring debt. Larger airports are complex structures, with multi-million dollar updates and improvements occurring annually. Providing increased flexibility for financing will allow airports to complete projects in a timely and efficient manner, benefitting both passengers and the local economy.
As discussed earlier, legislative history of AB 491 (2001), which enacted the current language that makes authority to collect the CFC "inoperative when the bonds used for financing are paid," indicates that the Legislature wanted to impose a temporary limitation on the collection of CFCs and did not want to authorize it as a type of fee that could be collected forever. The idea behind the indebtedness condition is clear: when the financing for a vehicle rental facility is paid off (i.e. there is no indebtedness), then the airport no longer needs to use the fee to pay off the bonds or other debt on the facility, and thus the legislative authority for collecting the fee ceases by operation of law. At its heart, the condition is intended to protect consumers by limiting the collection of the fee for a period of time and for certain purposes.
Proponents contend that consumers will continue to be sufficiently protected by other aspects of the existing statute, namely the limitations on what purposes the fee may be used for, and provisions that limit the aggregate amount of CFCs to be collected to an amount that shall not exceed the reasonable costs to finance, design and construct facilities, as determined by an independent auditor. (Section 5074.21 (b).) Proponents further contend that the rigorous auditing requirements for CFCs and the increased transparency and accountability requirements for alternative CFCs that were established by SB 1192 will also protect against airports abusing their authority to impermissibly collect or spend CFCs.
As proposed to be amended, this bill temporarily relaxes the indebtedness condition subject to a sunset date of 2023, allowing the Legislature to reevaluate operation of the law after a 5-year trial period. This bill does not seek to expand or change the permitted purposes for the CFC, and thus airports may continue to collect the CFC only for their current purposes—which, for example, does not include maintenance of the facility. A brief review by Committee staff of the detailed audit reports regularly provided to the Committee by the airports of Oakland, San Diego, San Jose, and Burbank-Glendale-Pasadena suggest that airports are acting responsibly in using the fees they are collecting. Nevertheless, because the authority to collect CFCs without the indebtedness requirement has never before applied generally to airports across California, the author proposes to amend the bill to incorporate a 5-year sunset date in the interest of ensuring legislative oversight and consumer protection.
As proposed to be amended, if this bill is enacted, Section 50474.21 will operate for 5 years (until January 1, 2023) without the requirement that the general authorization for an airport to impose a CFC becomes inoperative when the bonds are paid, and without the expiring authorization pertaining to the Oakland International Airport. Unless the statute is renewed or extended before the sunset date, the indebtedness condition and the 10 year exception for Oakland will be restored to Section 50474.21 on January 1, 2023.
Additional author's amendments affecting collection of the CFC. In addition to the 5 year sunset date, the author proposes two additional amendments affecting collection of CFCs—neither of which are intended to be subject to the 2023 sunset date. First, as proposed to be amended, an airport may charge a CFC pursuant to Section 50474.3 (a) "in an amount not to exceed $10” instead of the rigid $10 amount set forth by existing law. Currently airports that do not wish to charge the alternative per-day CFC under Section 50474.3 (b) can only charge $10 and not any lower amount. The proposed amendment is intended to provide a small additional amount of flexibility to airports that may want to charge less than the full $10 amount as may be suggested by their audit figures (although it is expected that will be the exception rather than the rule among airports that are already legally charging $10 per contract.)
Second, the author proposes to amend the bill to clarify that in no circumstance may an airport require a rental car company to collect a CFC twice from the same consumer for a single rental transaction. This clarifying amendment was one of two amendments sought by Enterprise Holdings on behalf of three rental car companies (Enterprise, Alamo, and National) which they stated would cause them to oppose the bill, unless adopted by the author. (The other amendment was a sunset date.) Because existing law arguably already prohibits this, the author has agreed to incorporate this amendment into the bill in this Committee.
Pending Related Legislation. AB 1286 (Friedman) would delete the requirement in existing law that airports begin the process to obtain authority for an alternative customer facility charge by January 1, 2018, thus allowing airports the opportunity to establish an alternative CFC in 2018 or any year afterwards without any time limitation. This bill is awaiting referral in the Assembly Rules Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Port of Oakland (sponsor)
California Airports Council
Oakland Chamber of Commerce
Oakland City Council President Larry E. Reid
Visit Oakland
Oppose (unless amended)
Enterprise Holdings
Analysis Prepared by:
Bill Author
Bill Co-Author(s):