BILL ANALYSIS Ó
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 616
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: Wright
VERSION: 1/6/14
Analysis by: Erin Riches FISCAL: yes
Hearing date: January 14, 2014
SUBJECT:
Airport Improvement Program: state matching funds
DESCRIPTION:
This bill allows the state Department of Transportation
(Caltrans) to provide state matching funds through the Airport
Improvement Program to projects that commence prior to receiving
those funds.
ANALYSIS:
The Airport Improvement Program (AIP), administered by the
Federal Aviation Administration (FAA), provides grants to public
agencies for the planning and development of public-use
airports. In general, the federal grant covers 75 percent of
eligible costs for large and medium primary hub airports, and 90
to 95 percent of eligible costs for small primary, reliever, and
general aviation airports. Eligible projects include capital
improvements related to safety, capacity, security, and
environment; operational and maintenance costs are generally not
eligible. In order to qualify for an AIP grant, a project
sponsor must be able to demonstrate that sufficient funds are
available for the non-federally-funded portion of the project.
To supplement AIP, Caltrans administers a State AIP Matching
Grant program. This program provides a state matching grant
equal to five percent of the federal grant. Caltrans'
regulations require that in order to be eligible for a state AIP
grant, a sponsor must have secured FAA approval and California
Environmental Quality Act compliance. In addition, the sponsor
cannot yet have broken ground on the project.
The Aeronautics Account, which funds the State AIP Matching
Grant Program, currently has a balance of approximately $5
million. The Aeronautics Account derives its revenue from fuel
excise taxes of 18 cents per gallon on general aviation fuel and
SB 616 (WRIGHT) Page 2
2 cents per gallon on jet fuel; these rates were set in 1994 and
1969, respectively. In addition, the 2009-10 budget transferred
$4 million from the State Aeronautics Account to the General
Fund. As a result of declining revenues and the transfer, the
program is able to fund only a small number of projects.
This bill suspends, until July 1, 2015, the Caltrans regulation
prohibiting a sponsor from receiving State AIP Matching Grant
Program funds for a project that has already commenced.
COMMENTS:
1.Purpose of the bill . According to the sponsors, the
Aeronautics Account has not recovered from the 2009-10 budget
transfer due to the continuing recessionary impacts to private
aviation. This shortfall has prevented Caltrans from
providing grants to all but a few eligible projects. As a
result, many FAA-approved construction projects at smaller
California airports - which have already landed commitments of
approximately $80 million in federal funds - have been
delayed. Suspending the Caltrans regulation prohibiting state
matching funds for projects that have already commenced will
enable project sponsors to break ground and create
construction jobs.
2.Where will the money come from ? While some local airports are
able to provide the required local match without state
funding, others lack the resources. Aviation stakeholders
plan to work through the budget process this year to get
additional funds allocated to the Aeronautics Account to help
fund these projects. Suspending the regulation will enable
sponsors to get projects started as soon as this bill is
signed, rather than being forced to wait for potential budget
allocations. While the bill currently does not contain an
urgency clause, the author plans to amend the bill to add one.
3.Does this bill solve the problem ? If the Legislature and
Governor choose not to provide additional funding to the
Aeronautics Account in the budget, project sponsors that have
commenced projects on the assumption of imminent state funding
could be caught short later. On the other hand, this bill
would allow sponsors with alternate funding to move forward.
4.Gut and amend . This bill originally pertained to public works
contracts. The author amended it on January 6, 2014, to
instead relate to airport funding.
SB 616 (WRIGHT) Page 3
POSITIONS: (Communicated to the committee before noon on
Wednesday, January
8, 2014.)
SUPPORT: Aircraft Owners and Pilots Association (sponsor)
Association of California Airports (sponsor)
California Airports Council (sponsor)
American Association of Airport Executives,
Southwest Chapter
OPPOSED: None received.