Wednesday, April 14, 2010
Brown: Officials Must Pay to Ride Freight Aircraft
By SHERRI M. OKAMOTO, Staff Writer
A state official’s use of a corporate aircraft belonging to a company whose commercial operations do not include passenger carriage would violate the constitutional ban on gifts of transportation, Attorney General Jerry Brown said in an opinion made public yesterday.
However, such travel would be permissible if the official pays the “fair market value” of the flight, as determined for gift-reporting purposes under the California Political Reform Act, Brown explained.
The advisory opinion was requested by Assembly Majority Leader Alberto Torrico of Fremont, one of six candidates in the June primary seeking the Democratic nomination to replace Brown, who is running for governor.
Torrico—who could not be reached for comment—asked whether an international package and freight delivery company would be subject to Article XII, Section 7, of the California Constitution, which prohibits a “transportation company” from granting “free passes or discounts to anyone holding an office in this state.”
Brown noted that courts have construed Section 7 to encompass commercial passenger airlines and bus lines, even though such businesses did not exist when the provision was initially adopted in 1879, and that judicial opinions routinely refer to freight shipping businesses as transportation companies, indicating that “businesses devoted to transporting property (as opposed to people) qualify as transportation companies.”
“Furthermore, if we advert to the usual definitions of the words involved, we have no doubt that the express package-delivery enterprise we discuss here would commonly be understood as a ‘company’ whose business is ‘transportation.’ ”
While Brown recognized that a “broad spectrum” of business enterprises and wealthy individuals commonly purchase or lease aircraft in order to facilitate their travel and obtain greater convenience, independence, service and comfort than might be afforded on a commercial flight, he emphasized that Section 7, by its terms, only restricts those businesses that qualify as “transportation companies” from offering use of private airplanes to public officials.
Brown declined to find that Section 7 only applies to companies that are regulated by the Public Utility Commission, which oversees the rates, routes, schedules, and other operations of certain entities, positing that the constitutional language was too broad to support such an interpretation.
“We are not free to assume that the drafters’ omission of the clause ‘subject to PUC regulation’ was accidental, nor are we free to read the clause into a sentence where it has been left out…,” he said. “[T]he degree to which the express-shipping provider in question does or does not come within the PUC’s regulatory purview is immaterial to the determination of the company’s status as a ‘transportation company.’ ”
Brown also rejected the suggestion that Section 7 should be narrowly construed as applying only to a transportation company’s regularly scheduled day-to-day services for which regular public fares are set.
“A seat on the corporate jet of a package-delivery company is no less ‘transportation’ than a seat on a regularly scheduled flight of a commercial passenger airline,” he said. “If the ride is offered for free, it amounts to a prohibited ‘free pass’ within the meaning of [S]ection 7 in any case.”
But, if the ride were offered at the “fair market value,” Brown reasoned, it would be neither free nor amount to a “discount” in price, allowing an elected or appointed official to accept the offer without violating Section 7.
The opinion, No. 08-309, was prepared for Brown by Deputy Attorney General Daniel G. Stone.
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