BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 616 (Wright) - California Aid to Airports Program: state
matching grants.
Amended: January 6, 2014 Policy Vote: T&H 11-0
Urgency: No Mandate: No
Hearing Date: January 21, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 616 would allow the Department of
Transportation (Caltrans) to allocate state matching grant
funding to a project sponsor that has already started or
completed a project under the California Aid to Airports Program
(until July 1, 2015, thereby providing a temporary exemption
from current regulatory requirements.
Fiscal Impact: Unknown significant cost pressures on the
Aeronautics Account through 2014-15 by increasing the pool of
projects eligible for an allocation to include projects that
have commenced or are already completed. The Aid to Airports
Program is currently oversubscribed and has a backlog of
eligible projects awaiting an allocation of funding from the
Aeronautics Account.
Background: 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.
Caltrans' Division of Aeronautics administers three grant
programs under the California Aid to Airports Program (CAAP)
with funds from the Aeronautics Account, which derives its
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revenue from an 18 cent per gallon excise tax on general
aviation gasoline and a 2 cent per gallon jet fuel tax. Prior
to 2010, these fuel tax revenues averaged $6.6 million per year,
but the average has declined to $5.2 million over the past three
years. From these revenues, a total of $2 million was made
available for local assistance programs in 2012-13, and
approximately $2.5 million was available for local assistance in
2013-14. Existing law specifies the priority for distribution
of available funds to the grant programs. First priority
provides Annual Credit Grants of $10,000 in discretionary funds
to each of the 150 eligible airports, which may be used for
local matching fund requirements for federal AIP grants. Second
priority provides state matching funds to airports for federal
AIP grants (AIP Matching Grants). The funding level for this
program is determined by the California Transportation
Commission (CTC) for each fiscal year and the current state
match is five percent of the federal grant to a particular
project, although the CTC has implemented a policy to limit any
single grant to $50,000 because of deficiencies in available
funding. The third funding priority provides any remaining
funds to the Acquisition and Development (A&D) Grant program for
Airport Land Use Compatibility Plans, safety, and preservation
projects that are selected by the CTC from the state Capital
Improvement Plan.
Existing regulations that govern the CAAP generally prohibit
payments from the Aeronautics Account to projects that a sponsor
has already started or completed prior to an allocation of AIP
Matching or A&D funds.
Proposed Law: SB 616 explicitly authorizes Caltrans to allocate
payments from the Aeronautics Account until July 1, 2015 for
projects that the sponsor has started or completed in accordance
with a federal AIP grant, notwithstanding the prohibition
against funding those projects in current regulations.
Staff Comments: Each year the California Transportation
Commission adopts a resolution identifying available state
funding to match federal AIP grants. In 2012-13, the CTC
allocated $1.65 million for state matching grants in the 2012-13
fiscal year, and $550,000 for 2013-14. Caltrans indicates that
these funding levels were insufficient to fund all of the
requests it received. Project applications that are submitted,
but not funded, are funded at a later date on a first-come-first
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served basis when funding is made available in future years.
Caltrans does not fund A&D projects until funding is already
provided for AIP matching grants, pursuant to existing statutory
priorities for allocating available CAAP funds. As of last
year, there was a backlog of 26 unfunded AIP matching grant
projects, with projected state matching costs of over $2
million, and 26 A&D projects with a projected state cost of over
$4 million.
Staff notes that the Governor's Proposed 2014-15 Budget includes
a proposal to transfer $4 million in the Local Airport Loan
Account to the Aeronautics Account. This one-time transfer
would provide $1 million for approximately 55 AIP matching
grants, and $3 million for 18 A&D grants that are currently on
the 2014 project list. This one-time augmentation is expected
to clear the backlog of approved projects, if it is approved by
the Legislature in the final 2014-15 Budget Act.
Staff notes that this bill would appear to create significant
cost pressures on the Aeronautics Account in the 2014-15 fiscal
year by expanding the pool of eligible project applicants to
include projects that have already commenced. As noted above,
there is a significant backlog of AIP matching grant projects
that currently comply with all regulatory requirements. While
this bill would allow projects currently on the approved project
list to start construction prior to receiving a state
allocation, the underlying problem of insufficient funding
remains for the time being.