Court Backs County on Airport Fees

In a move that clears the way for the county to boost airport revenues, a state Court of Appeal has ruled that the Board of Supervisors can charge fees of rental-car companies that are located outside John Wayne Airport but serve passengers there.

A three-judge panel of the 4th District Court of Appeal held unanimously that airport operators may charge “fair and reasonable” fees to rental car companies to compensate both for the burden imposed on the airport and for the benefit the firms gain by doing business there.

The decision, released Thursday, will have statewide impact because the court certified its ruling for publication, meaning it can be used as precedent in similar cases.

Alamo Rent-A-Car Inc. brought the suit in March, 1989, after the Orange County Board of Supervisors imposed an access fee on off-site car rental agencies that serve the airport. The case was widely watched because a host of other cities have imposed similar fees, including Los Angeles, San Francisco, Long Beach, Burbank and Palm Springs. Those cities filed friend-of-the-court briefs in the Orange County case supporting the supervisors’ right to impose the fees.

Alamo contended that the charges imposed in Orange County violated Proposition 13 because that law required an electoral vote for imposition of any “special tax” that does not qualify as a “user fee.” But the board contended that it had the right, as operator of the airport, to impose fees for its use.

The appellate court said that five of the rental car agencies serving passengers at John Wayne Airport are located on the airport property and obtained their positions through competitive bidding, so they are assessed 10% of their gross receipts. The board’s resolution in late 1988 set a fee of 9% of gross receipts for off-site rental car agencies.

Superior Court Judge William F. Rylaarsdam struck down the access charge, agreeing with Alamo that it was not a user fee under the government code but was a tax that violated Proposition 13.

In reversing that decision, the Court of Appeal panel noted that the board must operate the airport without cost to local taxpayers, but lacks the authority to levy a property tax in its role as airport operator.

The fee “cannot be treated as a special tax within the context of” Proposition 13, but is merely a fee normally imposed by governing bodies, the court said. It appears to be exempt from the two-thirds vote required by Proposition 13, the judges said, since the fee would have virtually no impact on the taxpayers themselves.

In addition, the panel said, the fee was not compulsory, since Alamo would pay only if it chose to do business at the airport.

The judges also found that such charges need not bear a direct relationship to the cost of providing the service--in this case, giving Alamo access to the airport.

“We are convinced the fees need not relate only to use of the airport roads and shuttle stops, but may apply to general airport maintenance and operational costs,” Justice Sheila Prell Sonenshine wrote for the court.