Existing law requires the Division of Aeronautics in the Department of Transportation, in consultation with certain transportation planning agencies, to prepare a California Aviation System Plan with prescribed elements. Existing law requires the division to submit the plan to the California Transportation Commission, to revise biennially the capital improvement plan element of the plan, and to revise the remainder of the plan every 5 years. Existing law requires the commission to adopt the plan or to revise and adopt the plan.

This bill would require the commission to prepare a funding needs assessment for the states general aviation airports. As part of the funding needs assessment, the bill would require the commission to forecast the expected revenue to pay for the costs identified in the needs assessment, any shortfall in revenue to cover the costs, and recommendations on how any shortfall should be addressed. The bill would require the funding needs assessment to be consistent with informed by the California Aviation System Plan and the most recent capital improvement plan. The bill would require the commission to submit the funding needs assessment to the Legislature on or before January 1, 2026.

Existing law requires the Division of Aeronautics in the Department of Transportation, in consultation with certain transportation planning agencies, to prepare a California Aviation System Plan with prescribed elements. Existing law requires the division to submit the plan to the California Transportation Commission, to revise biennially the capital improvement plan element of the plan, and to revise the remainder of the plan every 5 years. Existing law requires the commission to adopt the plan or to revise and adopt the plan.

This bill would require the commission to prepare a funding needs assessment for the states general aviation airports. As part of the funding needs assessment, the bill would require the commission to forecast the expected revenue to pay for the costs identified in the needs assessment, any shortfall in revenue to cover the costs, and recommendations on how any shortfall should be addressed. The bill would require the funding needs assessment to be consistent with the California Aviation System Plan and the most recent capital improvement plan. The bill would require the commission to submit the funding needs assessment to the Legislature on or before January 1, 2026.

Date of Hearing: August 16, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 258

Author:(Roth) – As Amended Ver:March 15, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill directs the California Transportation Commission (CTC) to prepare, and submit to the Legislature by January 1, 2026, a funding needs assessment for the state’s general aviation airports.

The CTC assessment is to:

1. Forecast the expected revenue, including federal, state and local revenues, to pay for the costs identified in the funding needs assessment, any shortfall in revenue to cover the costs and recommendations on how any shortfall should be addressed.
2. Be informed by the California Aviation System Plan prepared by the California Department of Transportation (Caltrans) and Caltrans’s most-recent capital improvement plan
3. Include a description of funding needs related to topics including safety, maintenance, improvements to address future air traffic, public safety operations, wildfire protection and prevention activities, the impacts of climate change, mitigation of community impacts from airport activities and the deployment of new technology, including zero- and near-zero emission fuels and vertical takeoff and landing aircraft.

FISCAL EFFECT:

According to the Department of Finance, CTC reports potential costs of approximately $500,000 (State Highway Account and Public Transportation Account) in one-time costs and for one limited-term position to prepare the assessment.

COMMENTS:

1. Purpose. The author intends this bill to implement a recommendation made in the CTC 2022 Annual Report to the California Legislature. According to the author:

In California, general aviation airports are a critical transportation resource, not only for business and personal travel, but also to support response to disasters and emergencies such as wildfires, among other uses. SB 258 will allow California to prepare a comprehensive inventory of specific projects to help guide state investments, enable access to federal funds that would otherwise be forfeited, and help provide solutions for how to address unmet needs.

1. Background.

General aviation airports. Federal Aviation Administration (FAA) regulations define a general aviation airport as a public-use airport that does not have scheduled service or has scheduled service with less than 2,500 passenger boardings each year. Caltrans identifies 241 general aviation airports in California and describes them as providing the following services: business/corporate, recreational and cargo; recreational flying, flight training and emergency response; and agriculture, firefighting, recreational access or medical and emergency support.

State and federal funding for general aviation airports. As reported in the 2020 California Aviation System Plan (2020 CASP), prepared by the Caltrans Division of Aeronautics, both the federal government and state government provide funding to general aviation airports. According to the 2020 CASP, the Airport Improvement Program (AIP) is the most common source of federal funding for public airports. The AIP provides general aviation airports with both an entitlement of $150,000 annually per airport, as well as discretionary grants awarded competitively for capacity enhancement and an airport’s importance to the national air transportation system. The AIP discretionary grants require a 10% match from a recipient airport.

Caltrans Division of Aeronautics provides grants and loans to fund airport projects for safety, maintenance, capital improvements and the preparation of airport land use compatibility plans through the California Aid to Airports Program (CAAP). The program provides a $10,000 state annual credit to each general aviation airport for airfield maintenance and construction projects and for airfield and land use compatibility planning. The program also provides grants to match up to 5% of a general aviation airports’ federal AIP grants from the FAA.

According to the 2020 CASP, state excise tax on general aviation fuel is the division’s primary source of revenue to fund and maintain its grant programs. Aviation gasoline is taxed at 18 cents per gallon and general aviation jet fuel at 2 cents per gallon, consistent with statute. The 2020 CASP describes the excise tax as a deteriorating revenue source:

Prior to fiscal year that began in 2009, revenues averaged approximately $7,500,000 annually. Since the Great Recession from 2008-CASP, these figures fell to $5,684,000, by State fiscal year 2019, creating challenges to fund robust grant programs that benefit public-use airports statewide…Continued decline in revenues, along with the effect of inflation on a per gallon excise tax, will erode the State’s ability to protect and bolster the State’s aviation system, will negatively impact GA [general aviation] airports that rely on State assistance, and reduce the Division’s contribution to CTP [California Transportation Plan] 2050 goals.

CTC identifies “funding issues;” recommends Legislature authorize a funding needs assessment. In its 2022 Annual Report to the California Legislature, CTC identified two “funding issues” relevant to general aviation airports: a) an unpaid loan of $22 million made from the Local Airport Loan Account to the General Fund in the 2020-21 state budget and b) a loss of federal AIP funding to California’s general aviation airports of, on average, $4 million per year over the past 10 years. CTC attributed the loss to insufficient state matching funds. Consequently, CTC made two recommendations: that the state repay the $22 million loan to the General Fund and that the Legislature authorize CTC to conduct a funding needs assessment for California’s general aviation airports, in consultation with Caltrans, representatives of the aviation industry and other stakeholders, and to identify funding needs related to addressing community impacts from airport activities and supporting electric vertical takeoff and landing vehicles.

This bill is consistent with CTC’s second recommendation.

Department of Finance opposition. The Department of Finance opposes this bill, arguing:

It increases state costs and because the Department of Transportation (Caltrans) already produces a regular report that includes various types of airport funding information. In addition, the study could create additional cost pressures depending on the assessment’s findings.

Caltrans has within it an aeronautics program that provides technical assistance to airports. The department maintains relationships with the airports and is better positioned than the Commission to produce a report like the one contained in this bill.

Every five years Caltrans is required to produce the California Aviation System Plan (CASP). The CASP includes information on aeronautics policy and guidance, economics and funding, infrastructure, and land use. This document is revised each time it is released, and if the Administration finds that a new general aviation needs assessment is warranted, Caltrans could include it in its next CASP. Given Caltrans’ expertise and experience in the aeronautics industry, the need for a new assessment by the Commission is unclear and potentially overlaps with existing workload.

It seems unreasonable to attribute to the bill “additional cost pressures depending on the assessment’s findings.” The assessment, presumably, identifies needs; but it does not create them, nor the costs to address those needs.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: 06-26-2023

ASSEMBLY COMMITTEE ON TRANSPORTATION

Laura Friedman, Chair

SBPCA Bill Id:SB 258

Author:(Roth) – As Amended Ver:March 15, 2023

SENATE VOTE: 29-8

SUBJECT: General aviation airports: funding needs assessment

SUMMARY: Requires the California Transportation Commission (CTC) to prepare a funding needs assessment for the state’s general aviation airports and submit the assessment to the Legislature on or before January 1, 2026. Specifically, this bill:

1. Requires the CTC to prepare a funding needs assessment for the state’s general aviation airports and submit the assessment to the Legislature on or before January 1, 2026.
2. Requires the funding needs assessment to be informed by the California Aviation System Plan (CASP) and the most recent version of the capital improvement plan (CIP) and include, but not be limited to:
3. A forecast of the expected revenues, including federal, state, and local, to pay for the costs identified in the assessment;
4. A description of funding needs related to safety, maintenance, improvement to address future air traffic, public safety operations, wildfire protection and prevention activities, the impacts of climate change, maintenance, improvements to address future air traffic, mitigation of community impacts from airport activities, and the deployment of new fuel and aircraft technology; and,
5. Recommendations to address any shortfall in revenue identified.
6. Directs the CTC to consult with relevant stakeholders to develop the assessment, including Caltrans, the Federal Aviation Administration (FAA), the airport industry, users of general aviation airports, and appropriate local and regional governments.

EXISTING LAW:

1. Creates the CTC, with various powers and duties relative to the programming of transportation capital projects and allocation of funds to those projects pursuant to various transportation funding programs. (Government Code (GOV) 14520-14534).
2. Requires the Division of Aeronautics (Division) in the Department of Transportation (Caltrans) to prepare a CASP that includes elements relating to: (Public Utilities Code 21701 – 21707)
3. Air transportation issues including aviation safety, airport noise and ground access, transportation systems management, airport financing, airport land use compatibility planning, and institutional relationships;
4. The aviation elements of regional transportation plans and a regional plan alternative containing an evaluation of the impacts of regional activity in relation to the statewide air transportation system. This includes funding proposals by general aviation and air carrier public use airports for consideration by the CTC;
5. A state plan alternative including an evaluation of the statewide air transportation matters relating to growth and an evaluation of the system to designate an adequate number of general aviation and air carrier public use airports for state funding;
6. A comparison of the regional plan alternative with the state plan alternative including consideration of airport noise, air quality, toxic waste cleanup, energy, economics, and passengers served; and,
7. A 10-year CIP for each airport that has been approved by the applicable transportation planning agency.
8. Requires the Division to revise the CIP of the CASP biennially and to revise all other elements every five years.
9. Requires the Division to submit the CASP and all revisions to the CTC for hearing and adoption.
10. Requires that every project submitted for funding from the Aeronautics Account in the State Transportation Fund to be consistent with the CASP.

FISCAL EFFECT: According to the Senate Appropriations Committee:

• CTC estimates the following costs for the needs assessment: one-time consultant contracting costs in the low hundreds of thousands, and state operations costs of approximately $280,000 annually for three years for 1.0 PY (limited term Supervising Transportation Planner) to convene stakeholders, oversee the contract, and develop the assessment. (State Highway Account and Public Transportation Account)
• This bill could result in significant General Fund and special fund cost pressures to provide additional state funding for general aviation airports, to the extent that the assessment required by this bill identifies significant deficiencies in state resources. Staff notes that additional state augmentations would likely result in increased federal funding for general aviation airport projects.

COMMENTS:

General aviation (GA) airports do not have scheduled service or have scheduled service with less than 2,500 passenger boardings each year. They are essential for statewide emergency preparedness and response, such as transporting critically injured patients, aerial firefighting, law enforcement, and disaster relief. GA airports provide access to remote communities and contribute to commercial applications such as agricultural spraying, aerial surveying, and private travel. There are thousands of general aviation airports across the country and according to the 2020 CASP there are 241 in California. California’s general aviation airports are estimated to support $33 billion in economic output and more than 148,000 jobs.

Federal government provides funding to GA airports. The FFA administers the federal Airport Improvement Program (AIP) which provides grants to public agencies for the planning and development of public-use airports. Grants are distributed to airports as entitlement grants and discretionary grants. Entitlement grants are apportioned to airports by formula and GA airports receive an entitlement of $150,000 annually. The FAA awards discretionary grants on a competitive basis for individual projects based on capacity enhancement and their importance to the national air transportation system. These federal grants require a 10% local match from GA airports. To maximize the number of federal grants the state caps its funding match at 5% for each grant.  However, because funding for the state’s AIP has fluctuated over a 10-year period Caltrans was only able to fund 70% of the total amount of eligible AIP requests.

Caltrans’ Division of Aeronautics administers the Aeronautics Program which consists of: (1) an Annual Credits Program, which provides $10,000 grants or “credits” to each of the state’s GA airports for discretionary use, (2) AIP Matching Grants, which assist airports in meeting the local match for FFA grants; and (3) Acquisition and Development Grants, which fund capital improvement projects, including repair or replacement, and expenditures for compatible land use planning in the area surrounding an airport.

Lack of state compliance with federal law. Federal law requires all tax revenue generated by aviation to be spent on aviation capital or operational expenses and restricts spending on non-aviation expenses. The state’s GA fuel excise tax is collected at the rate of 2¢ per gallon for non-commercial jet fuel and 18¢ per gallon for aviation gasoline. Based on the most recent data available from 2007, $365 million in GA taxes were collected. Of this amount, only about 2% was deposited into the Aeronautics Account for aviation purposes. Of the remaining funding, 38% was deposited into the State’s General Fund, and 60% was allocated to local governments that support programs such as transit, public safety, schools, and special districts.

The state not depositing the full amount of tax revenue from GA airports to the Aeronautics Account has resulted in the state not having enough funding to fully match and receive federal funding that GA airports are eligible for. These funds could be used to address community impacts from airport activities, and support electric vertical takeoff and landing vehicles.

Recent budget actions exacerbate funding situation for GA airports. In its 2022 Annual Report to the Legislature, the CTC flagged two issues in the funding program supporting California’s GA airports. During the COVID-19 pandemic, $22 million was borrowed from the Local Airport Loan Account to supplement the state’s General Fund and this loan remains unpaid. Additionally, for the last 10 years, California’s general aviation airports have lost, on average $4 million per year in federal funding because they were unable to secure state matching funds, as discussed above. Finally, funding was not available for the CTC to allocate for Acquisition and Development Grants, for which there are currently 10 unfunded general aviation projects programmed in Del Norte, Humboldt, and Kern counties and expansion and safety projects in Mono County, totaling $2.2 million.

CASP. The Division of Aviation develops the CASP every five years to describe the capabilities of the state’s aviation system, assess its needs, and contribute to the state’s transportation goals. The 2020 CASP contains several components, including an inventory of the state’s aviation assets, an evaluation and recommendations for the Division’s policy goals, and 10-year the capital improvement plan which is a 10-year list of all capital and planning projects submitted to Caltrans. One element in the 2020 CASP was a General Aviation System Needs Assessment (GASNA) which was last updated in 2013. This GASNA identified upgrades needed by individual airports to meet minimum standards for their classification and their costs. It did not focus on forecasting for growth or considering new technologies.

This bill would require the CTC to conduct a funding needs assessment for the state’s general aviation creating an overview of current and potential funding sources for GA airports and report its findings to the Legislature. Moving forward, the committee encourages the authors to work with Caltrans to ensure the deadline for this report is feasible for the department.

According to the author, “In California, general aviation airports are a critical transportation resource, not only for business and personal travel, but also to support response to disasters and emergencies such as wildfires, among other uses. SB 258 will allow California to prepare a comprehensive inventory of specific projects to help guide state investments, enable access to federal funds that would otherwise be forfeited, and help provide solutions for how to address unmet needs.”

Previous legislation

SB 1121 (Gonzalez), Chapter 508, Statutes of 2022. Required the CTC to prepare a financial needs assessment for the state and local ground transportation system for the next 10 years by January 1, 2025 and every five years thereafter.

AB 1406 (Karnette of 2005). Would have required the OHS to report to the Legislature and the governor on port security funding needs, recommendations for securing federal and private funds, and allocation criteria for these funds. AB 1406 was vetoed by Governor Schwarzenegger, who believed the reporting requirement was duplicative with existing reporting from the OHS and would not directly improve port security.

AB 2237 (Karnette), Chapter 503, Statutes of 2006. Required Homeland Security to include an additional report in its annual report to the Legislature on expenditures of homeland security and bioterrorism funds. The report included elements pertaining to the policies, projects, and funding necessary to protect the state's harbor facilities, port facilities, and the commercial marine transportation sector from terrorist attack.

REGISTERED SUPPORT / OPPOSITION:

Support

Aircraft Owners and Pilots Association
Association of California Airports
California Airports Council
California Pilots Association
California Transportation Commission
Helicopter Association International
National Air Transportation Association
National Business Aviation Association
Riverside Municipal Airport
Tom Wathen Center at Flabob Airport

Opposition

None on file

Analysis Prepared by: Dirk Spencer / TRANS. / (916) 319-2093, Farra Bracht / TRANS. / (916) 319-2093

 THIRD READING  

Bill No: SB 258

Author: Roth (D)

Amended: 3/15/23

Vote: 21

SENATE TRANSPORTATION COMMITTEE: 14-0, 3/28/23

AYES: Gonzalez, Niello, Allen, Becker, Blakespear, Cortese, Dodd, Limón, McGuire, Newman, Nguyen, Seyarto, Umberg, Wahab

NO VOTE RECORDED: Archuleta, Dahle

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/18/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

SUBJECT: General aviation airports: funding needs assessment

SOURCE: Author

DIGEST:

This bill requires the California Transportation Commission to prepare a funding needs assessment for the state’s general aviation airports and submit the assessment to the Legislature on or before January 1, 2026.

ANALYSIS:

Existing law:

1. Creates the California Transportation Commission (CTC), with various powers and duties relative to the programming of transportation capital projects and allocation of funds to those projects pursuant to various transportation funding programs. (Government Code (GOV) §14520-14534).
2. Requires the Division of Aeronautics (Division) in the Department of Transportation (Caltrans) to prepare a California Aviation Systems Plan (CASP) that includes elements relating to: (Public Utilities Code §21701 – 21707)
   1. Air transportation issues including aviation safety, airport noise and ground access, transportation systems management, airport financing, airport land use compatibility planning, and institutional relationships;
   2. The aviation elements of regional transportation plans and a regional plan alternative containing an evaluation of the impacts of regional activity in relation to the statewide air transportation system. This includes funding proposals by general aviation and air carrier public use airports for consideration by the CTC;
   3. A state plan alternative including an evaluation of the statewide air transportation matters relating to growth and an evaluation of the system to designate an adequate number of general aviation and air carrier public use airports for state funding;
   4. A comparison of the regional plan alternative with the state plan alternative including consideration of airport noise, air quality, toxic waste cleanup, energy, economics, and passengers served; and
   5. A 10-year capital improvement plan (CIP) for each airport that has been approved by the applicable transportation planning agency.
3. Requires the Division to revise the CIP of the CASP biennially and to revise all other elements every five years.
4. Requires the Division to submit the CASP and all revisions to the CTC for hearing and adoption.
5. Requires that every project submitted for funding from the Aeronautics Account in the State Transportation Fund to be consistent with the CASP.

This bill:

1. Requires the CTC to prepare a funding needs assessment for the state’s general aviation airports and submit the assessment to the Legislature on or before January 1, 2026.
2. Requires the funding needs assessment to be informed by the CASP and the most recent version of the CIP and include, but not be limited to:
   1. A forecast of the expected revenues, including federal, state, and local, to pay for the costs identified in the assessment;
   2. A description of funding needs related to safety, maintenance, improvement to address future air traffic, public safety operations, wildfire protection and prevention activities, the impacts of climate change, maintenance, improvements to address future air traffic, mitigation of community impacts from airport activities, and the deployment of new fuel and aircraft technology; and
   3. Recommendations to address any shortfall in revenue identified.
3. Directs the CTC to consult with relevant stakeholders to develop the assessment, including Caltrans, the Federal Aviation Administration (FAA), the airport industry, users of general aviation airports, and appropriate local and regional governments.

Comments

1. Purpose of bill. According to the author, “In California, general aviation airports are a critical transportation resource, not only for business and personal travel, but also to support response to disasters and emergencies such as wildfires, among other uses. SB 258 will allow California to prepare a comprehensive inventory of specific projects to help guide state investments, enable access to federal funds that would otherwise be forfeited, and help provide solutions for how to address unmet needs.”
2. General aviation airports. General aviation airports are airports that do not have scheduled service or have scheduled service with less than 2,500 passenger boardings each year. There are thousands of general aviation airports across the country and according to the 2020 CASP there are 241 in California. According to the FAA, general aviation airports are essential for statewide emergency preparedness and response such as transporting critically injured patients, aerial firefighting, law enforcement, and disaster relief. General aviation airports provide access to remote communities and contribute to commercial applications such as agricultural spraying, aerial surveying, and private travel. According to the 2020 CASP, California’s general aviation airports are estimated to support $33 billion in economic output and more than 148,000 jobs.
3. Funding support for general aviation airports. The federal Airport Improvement Program (AIP), administered by the FAA, provides grants to public agencies for the planning and development of public-use airports. Grants under the AIP are distributed to airports in two ways: entitlement grants and discretionary grants. Entitlement grants are apportioned to airports by formula. General aviation airports receive an entitlement of $150,000 annually. The FAA awards discretionary grants on a competitive basis for individual projects based on capacity enhancement and their importance to the national air transportation system. In general, the federal grants cover 90 percent of eligible costs for small primary, reliever, and general airports. Eligible projects include capital improvements related to safety, capacity, security, and environment. Operational and maintenance costs are generally not eligible for AIP assistance. To supplement AIP, Caltrans administers a state AIP Matching Grant Program which provides a state matching grant equal to 5 percent of the overall project costs, leaving the airport to provide the remaining 5 percent. This program is funded at $2.5 million per year through FY 2024-25 from excess funds available from the Local Airport Loan Account.
4. The California Aviation System Plan (CASP). The Division of Aviation develops the CASP in order to describe the capabilities of the state’s aviation system, assess its needs, and contribute to the state’s transportation goals. The Division is required to update the CASP every five years, which was most recently performed in 2020. The CASP contains several components including an inventory of the state’s aviation assets, an evaluation and recommendations for the Division’s policy goals, and the capital improvement plan, a 10-year list of all capital and planning projects submitted to Caltrans. One element in the 2010 CASP was a General Aviation System Needs Assessment (GASNA) which was last updated in 2013. This GASNA identified upgrades needed by individual airports to meet minimum standards for their classification and their costs. It did not focus on forecasting for growth or considering new technologies.
5. Soaring costs, crashing revenues, with poor visibility. In their 2022 Annual Report to the Legislature, the CTC flagged serious issues in the funding program supporting California’s general aviation airports. During the COVID-19 pandemic a $22 million loan was made from the Local Airport Loan Account, which funds the AIP, to supplement the General Fund. This loan has not yet been repaid while several general aviation projects have gone unfunded, including maintenance projects in Del Norte, Humboldt, and Kern counties and expansion and safety projects in Mono County.

Funding for the AIP Matching Grants used to be provided from excise tax revenues, but according to the CTC, these revenues are no longer sufficient to support these programs. The aviation gasoline excise tax of $0.18 a gallon was last adjusted in 1994. The jet fuel excise tax was set at $0.02 in 1969. Revenues from these taxes have fallen from approximately $7.5 million to $6 million annually since FY 2009-2010.

Because of the instability in and diminishing of the revenue funding the AIP Matching Program, along with increasing costs for projects due to inflation, the program has been unable to effectively take advantage of federal funds to support California’s general aviation airports. According to the CTC, California’s general aviation airports have lost on average $4 million per year in federal funding over the last 10 years because the AIP has been unable to provide sufficient local matching funds. Over the last 10 years, Caltrans was only able to fund 70% of eligible state AIP requests.

1. Funding needs assessments to chart a flight plan. The primary goal of the CASP is to develop policy goals and inventory assets and project requests. It is not meant to prioritize or rank projects based on need, or to develop a cohesive statewide funding strategy. The last time a needs assessment focused on the general aviation system was made was over a decade ago as part of the CASP and its scope was narrower. The needs assessment proposed by this bill will provide the CTC and the Legislature important information on how much proposed future general aviation projects cost, how many projects will go unfunded based on current revenues and costs, and what options are available to address that shortfall and to ensure matching federal funds are not lost.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, the CTC estimates one-time consultant contracting costs in the low hundreds of thousands, and state operations costs of approximately $280,000 annually for three years for 1.0 PY (limited term Supervising Transportation Planner) to convene stakeholders, oversee the contract, and develop the assessment. (State Highway Account and Public Transportation Account)

This bill could result in significant General Fund and special fund cost pressures to provide additional state funding for general aviation airports, to the extent that the assessment required by this bill identifies significant deficiencies in state resources. Staff notes that additional state augmentations would likely result in increased federal funding for general aviation airport projects.

SUPPORT: (Verified 5/19/23)

Aircraft Owners and Pilots Association

Association of California Airports

California Airports Council

California Transportation Commission

Riverside Municipal Airport

Tom Wathen Center at Flabob Airport

OPPOSITION: (Verified 5/19/23)

None received

Prepared by: Jacob O'Connor / TRANS. / (916) 651-4121

5/20/23 12:41:10

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 258 (Roth) - General aviation airports: funding needs assessment

Bill Summary:

SB 258 would require the California Transportation Commission (CTC) to prepare a funding needs assessment for the state’s general aviation airports, as specified, and submit the assessment to the Legislature by January 1, 2026.

Fiscal Impact:

• CTC estimates the following costs for the needs assessment: one-time consultant contracting costs in the low hundreds of thousands, and state operations costs of approximately $280,000 annually for three years for 1.0 PY (limited term Supervising Transportation Planner) to convene stakeholders, oversee the contract, and develop the assessment. (State Highway Account and Public Transportation Account)
  
• This bill could result in significant General Fund and special fund cost pressures to provide additional state funding for general aviation airports, to the extent that the assessment required by this bill identifies significant deficiencies in state resources. Staff notes that additional state augmentations would likely result in increased federal funding for general aviation airport projects. (see Staff Comments)

Background:

Existing law requires the Department of Transportation’s Division of Aeronautics to prepare a California Aviation Systems Plan (CASP) that includes the following elements:

• Air transportation issues including aviation safety, airport noise and ground access, transportation systems management, airport financing, airport land use compatibility planning, and institutional relationships.
• The aviation elements of regional transportation plans, and a regional plan alternative containing an evaluation of the impacts of regional activity in relation to the statewide air transportation system. This element must include funding proposals by general aviation and air carrier public use airports for consideration by the CTC.
• A state plan alternative including an evaluation of the statewide air transportation matters relating to growth and an evaluation of the system to designate an adequate number of general aviation and air carrier public use airports for state funding.
• A comparison of the regional plan alternative with the state plan alternative including consideration of airport noise, air quality, toxic waste cleanup, energy, economics, and passengers served.
• A 10-year capital improvement plan (CIP) for each airport that has been approved by the applicable transportation planning agency.

Existing law requires the Division of Aeronautics revise the CIP biennially, and revise all other elements every five years. The CASP and all revisions must be submitted to the CTC for hearing and adoption. The most recent CASP update was adopted in 2020.

General aviation airports are airports that do not have scheduled service or have scheduled service with less than 2,500 passenger boardings each year. There are thousands of general aviation airports across the country, and the 2020 CASP identifies 241 such airports in California. According to the Federal Aviation Administration (FAA), general aviation airports are essential for statewide emergency preparedness and response such as transporting critically injured patients, aerial firefighting, law enforcement, and disaster relief. General aviation airports provide access to remote communities and contribute to commercial applications such as agricultural spraying, aerial surveying, and private travel.

The federal Airport Improvement Program (AIP), administered by the FAA, provides grants to public agencies for the planning and development of public-use airports. Grants under the AIP are distributed to airports as entitlement grants of $150,000 annually for each airport, and discretionary grants that are awarded on a competitive basis for individual projects based on capacity enhancement and their importance to the national air transportation system. In general the federal discretionary grants cover 90 percent of eligible costs for small primary, reliever, and general airports. Eligible projects include capital improvements related to safety, capacity, security, and environment (operational and maintenance costs are generally not eligible for AIP assistance). To supplement AIP, Caltrans administers a state AIP Matching Grant Program which provides a state matching grant equal to 5 percent of the overall project costs, leaving the airport to provide the remaining 5 percent as a local match. The state AIP component is funded at $2.5 million per year through FY 2024-25 from excess funds available from the Local Airport Loan Account.

Proposed Law:

SB 258 would require the CTC to prepare a funding needs assessment for the state’s general aviation airports. Specifically, this bill would:

• Require the CTC, as part of the assessment, to forecast expected federal, state, and local revenues to pay for identified costs, identify any revenue shortfalls, and make recommendations on how to address those shortfalls, as specified.
• Require the assessment to be informed by the California Aviation System Plan and the most recent capital improvement plan, as specified.
• Require the assessment to include a description of funding needs related to topics that include safety, maintenance, improvement to address future air traffic, public safety operations, wildfire protection and prevention activities, the impacts of climate change, maintenance, improvements to address future air traffic, mitigation of community impacts from airport activities, and the deployment of new fuel and aircraft technology, as specified.
• Authorize the CTC to use existing reports or analyses in developing the assessment.
• Require the CTC to consult with relevant stakeholders in developing the assessment, including Caltrans, the FAA, the airport industry, general aviation airport users, and appropriate local and regional governments.
• Require the CTC to submit the funding needs assessment to the Legislature by January 1, 2026.
• Repeal the provisions of this bill on January 1, 2030.

Related Legislation:

SB 1121 (Gonzalez), Chap. 508/2022, required the CTC to prepare a financial needs assessment of the costs to operate, maintain, and provide for the future growth of the state and local transportation system for the next 10 years by January 1, 2025, and every five years thereafter.

Staff Comments:

This bill would implement a recommendation from the CTC’s 2022 Annual Report to the Legislature. The report item notes a decline in available state funding to support the state’s airport grant programs, including the Airport Improvement Program (AIP), which is currently funded at $2.5 million annually from the Local Airport Loan Account. The report indicates that Caltrans has only been able to fund 70% of the total amount of eligible AIP requests over the previous ten years, resulting in the loss of available federal funding for general aviation airport projects (an average of $4 million per year in federal funds over that period). As noted above, the federal program provides 90% of project funding, but requires a 10% local match, of which the state AIP program provides half of the matching funds. The CTC recommends that “the Legislature authorize a funding needs assessment for California’s general aviation airports, including recommendations to ensure that California airports can cully leverage available federal general aviation grants, address community impacts from airport activities, and support electric vertical takeoff and landing vehicles.”

The CTC’s 2021 Annual Report also highlighted funding issues for programs supporting general aviation airports and recommended repayment of a $22 million loan made from the Local Airport Loan Account to the General Fund as part of the 2020-21 Budget Act in order to fund more general aviation improvements. The CTC continues to recommend repayment of the loan. Staff notes that, according to the Department of Finance, the outstanding balance on the loan is $21,800,000 and it is projected to be repaid to the Local Airport Loan Account in 2024-25.

SB 258 requires the CTC to conduct the general aviation airport funding needs assessment by January 1, 2026, and the CTC estimates that it would need 1.0 PY of new staff to convene the stakeholder group, oversee a specified consultant contract, and develop the assessment. Staff notes that the new PY would likely be authorized through a budget change proposal as part of the 2024-25 budget process, so work on the funding needs assessment may not begin until July 1, 2025, unless the CTC shifts resources in the short-term to convene stakeholders and manage the consultant contract.

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SENATE COMMITTEE ON TRANSPORTATION

Senator Lena Gonzalez, Chair

2023 - 2024 Regular

Bill No: SB 258 Hearing Date: 3/28/2023

SUBJECT: General aviation airports: funding needs assessment

DIGEST: This bill requires the California Transportation Commission to prepare a funding needs assessment for the state’s general aviation airports and submit the assessment to the Legislature on or before January 1, 2026.

ANALYSIS:

Existing law:

1. Creates the California Transportation Commission (CTC), with various powers and duties relative to the programming of transportation capital projects and allocation of funds to those projects pursuant to various transportation funding programs. (Government Code (GOV) §14520-14534).
2. Requires the Division of Aeronautics (Division) in the Department of Transportation (Caltrans) to prepare a California Aviation Systems Plan (CASP) that includes elements relating to: (Public Utilities Code §21701 – 21707)
   1. Air transportation issues including aviation safety, airport noise and ground access, transportation systems management, airport financing, airport land use compatibility planning, and institutional relationships;
   2. The aviation elements of regional transportation plans and a regional plan alternative containing an evaluation of the impacts of regional activity in relation to the statewide air transportation system. This includes funding proposals by general aviation and air carrier public use airports for consideration by the CTC;
   3. A state plan alternative including an evaluation of the statewide air transportation matters relating to growth and an evaluation of the system to designate an adequate number of general aviation and air carrier public use airports for state funding;
   4. A comparison of the regional plan alternative with the state plan alternative including consideration of airport noise, air quality, toxic waste cleanup, energy, economics, and passengers served; and
   5. A 10-year capital improvement plan (CIP) for each airport that has been approved by the applicable transportation planning agency.
3. Requires the Division to revise the CIP of the CASP biennially and to revise all other elements every five years.
4. Requires the Division to submit the CASP and all revisions to the CTC for hearing and adoption.
5. Requires that every project submitted for funding from the Aeronautics Account in the State Transportation Fund to be consistent with the CASP.

This bill:

1. Requires the CTC to prepare a funding needs assessment for the state’s general aviation airports and submit the assessment to the Legislature on or before January 1, 2026.
2. Requires the funding needs assessment to be informed by the CASP and the most recent version of the CIP and include, but not be limited to:
   1. A forecast of the expected revenues, including federal, state, and local, to pay for the costs identified in the assessment;
   2. A description of funding needs related to safety, maintenance, improvement to address future air traffic, public safety operations, wildfire protection and prevention activities, the impacts of climate change, maintenance, improvements to address future air traffic, mitigation of community impacts from airport activities, and the deployment of new fuel and aircraft technology; and
   3. Recommendations to address any shortfall in revenue identified.
      
3. Directs the CTC to consult with relevant stakeholders to develop the assessment, including Caltrans, the Federal Aviation Administration (FAA), the airport industry, users of general aviation airports, and appropriate local and regional governments.

COMMENTS:

1. Purpose of bill. According to the author, “In California, general aviation airports are a critical transportation resource, not only for business and personal travel, but also to support response to disasters and emergencies such as wildfires, among other uses. SB 258 will allow California to prepare a comprehensive inventory of specific projects to help guide state investments, enable access to federal funds that would otherwise be forfeited, and help provide solutions for how to address unmet needs.”
2. General aviation airports. General aviation airports are airports that do not have scheduled service or have scheduled service with less than 2,500 passenger boardings each year. There are thousands of general aviation airports across the country and according to the 2020 CASP there are 241 in California. According to the FAA, general aviation airports are essential for statewide emergency preparedness and response such as transporting critically injured patients, aerial firefighting, law enforcement, and disaster relief. General aviation airports provide access to remote communities and contribute to commercial applications such as agricultural spraying, aerial surveying, and private travel. According to the 2020 CASP, California’s general aviation airports are estimated to support $33 billion in economic output and more than 148,000 jobs.
3. Funding support for general aviation airports. The federal Airport Improvement Program (AIP), administered by the FAA, provides grants to public agencies for the planning and development of public-use airports. Grants under the AIP are distributed to airports in two ways: entitlement grants and discretionary grants. Entitlement grants are apportioned to airports by formula. General aviation airports receive an entitlement of $150,000 annually. The FAA awards discretionary grants on a competitive basis for individual projects based on capacity enhancement and their importance to the national air transportation system. In general the federal grants cover 90 percent of eligible costs for small primary, reliever, and general airports. Eligible projects include capital improvements related to safety, capacity, security, and environment. Operational and maintenance costs are generally not eligible for AIP assistance. To supplement AIP, Caltrans administers a state AIP Matching Grant Program which provides a state matching grant equal to 5 percent of the overall project costs, leaving the airport to provide the remaining 5 percent. This program is funded at $2.5 million per year through FY 2024-25 from excess funds available from the Local Airport Loan Account.
   
4. The California Aviation System Plan (CASP). The Division of Aviation develops the CASP in order to describe the capabilities of the state’s aviation system, assess its needs, and contribute to the state’s transportation goals. The Division is required to update the CASP every five years, which was most recently performed in 2020. The CASP contains several components including an inventory of the state’s aviation assets, an evaluation and recommendations for the Division’s policy goals, and the capital improvement plan, a 10-year list of all capital and planning projects submitted to Caltrans. One element in the 2010 CASP was a General Aviation System Needs Assessment (GASNA) which was last updated in 2013. This GASNA identified upgrades needed by individual airports to meet minimum standards for their classification and their costs. It did not focus on forecasting for growth or considering new technologies.
5. Soaring costs, crashing revenues, with poor visibility. In their 2022 Annual Report to the Legislature, the CTC flagged serious issues in the funding program supporting California’s general aviation airports. During the COVID-19 pandemic a $22 million loan was made from the Local Airport Loan Account, which funds the AIP, to supplement the General Fund. This loan has not yet been repaid while several general aviation projects have gone unfunded, including maintenance projects in Del Norte, Humboldt, and Kern counties and expansion and safety projects in Mono County.

Funding for the AIP Matching Grants used to be provided from excise tax revenues, but according to the CTC, these revenues are no longer sufficient to support these programs. The aviation gasoline excise tax of $0.18 a gallon was last adjusted in 1994. The jet fuel excise tax was set at $0.02 in 1969. Revenues from these taxes have fallen from approximately $7.5 million to $6 million annually since FY 2009-2010.

Because of the instability in and diminishing of the revenue funding the AIP Matching Program, along with increasing costs for projects due to inflation, the program has been unable to effectively take advantage of federal funds to support California’s general aviation airports. According to the CTC, California’s general aviation airports have lost on average $4 million per year in federal funding over the last 10 years because the AIP has been unable to provide sufficient local matching funds. Over the last 10 years, Caltrans was only able to fund 70% of eligible state AIP requests.

1. Funding needs assessments to chart a flight plan. The primary goal of the CASP is to develop policy goals and inventory assets and project requests. It is not meant to prioritize or rank projects based on need, or to develop a cohesive statewide funding strategy. The last time a needs assessment focused on the general aviation system was made was over a decade ago as part of the CASP and its scope was narrower. The needs assessment proposed by this bill will provide the CTC and the Legislature important information on how much proposed future general aviation projects cost, how many projects will go unfunded based on current revenues and costs, and what options are available to address that shortfall and to ensure matching federal funds are not lost.
2. Do we need a separate report? While the CASP may not currently try to encompass the information requested in this bill, it is the state’s primary document for planning aviation needs. If this is meant to be a single report it may make sense for it to stand alone and be managed by the CTC. But if the author intends for this needs assessment to become a recurring part of California’s aviation infrastructure planning, they may wish to consider amending the bill to modify the CASP to include a GASNA, so that it can benefit from the existing process involved with producing the CASP.

Related Legislation:

SB 1121 (Gonzalez, Chapter 508, Statutes of 2022) – Required the CTC to prepare a financial needs assessment for the state and local ground transportation system for the next 10 years by January 1, 2025 and every five years thereafter.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

Unknown.

POSITIONS: (Communicated to the committee before noon on Wednesday, March 22, 2023.)

SUPPORT:

Aircraft Owners and Pilots Association

Association of California Airports

California Airports Council

California Transportation Commission

Riverside Municipal Airport

Tom Wathen Center At Flabob Airport

OPPOSITION:

None received

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