BILL ANALYSIS Ó
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THIRD READING
Bill No: SB 616
Author: Wright (D), et. al.
Amended: 1/27/14
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 11-0, 1/14/14
AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,
Lara, Liu, Pavley, Roth, Wyland
SENATE APPROPRIATIONS COMMITTEE : 6-0, 1/23/14
AYES: De León, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
SUBJECT : Airport Improvement Program: state matching funds
SOURCE : Aircraft Owners and Pilots Association
Association of California Airports
California Airports Council
DIGEST : This bill allows, until July 1, 2015, 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, as
specified.
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% of eligible
costs for large and medium primary hub airports, and 90 to 95%
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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 5% 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
two-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, unless
the project was started or completed prior to January 1, 2014.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, 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.
SUPPORT : (Verified 1/27/14)
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Aircraft Owners and Pilots Association (co-source)
Association of California Airports (co-source)
California Airports Council (co-source)
ARGUMENTS IN SUPPORT : 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.
JA:d 1/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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