Tuesday, June 12, 2001
Significant Aviation-Related Bills in the California
Many bills are "on hold", pending budget deliberations, since some provide for tax exemptions and appropriations in the California Legislature.
For transportation needs assessment, AB 631 and SB 869 would assess transportation deficiencies and needs.
Airport expansion is a controversial issue that has attracted legislation in Congress, as well as the California Legislature. SB 244 is concerned with SFO's expansion, and the role that San Mateo County would have, if the bill is passed. H.R. 2107 by Illinois Congressman Lipinski would preempt states and their political subdivisions from prohibiting airport expansion among the medium and large hub airports.
1. AB1X 57 and AB2X 30 (Dutra): “Electrical Corporations: Crude Petroleum Refineries”: California’s energy crisis has caused service disruptions statewide. AB1X 57 (in the first extraordinary session) is intended to give priority for the manufacture and transportation of “critical fuels” during the crisis. AB2X 30 (in the second extraordinary session) is intended to create a separate priority for crude petroleum refineries to prevent shortages of critical fuels. Under AB1X 57, aviation fuels would be included in the “essential use” category of the “crude petroleum refinery”. AB1X 57 and AB2X 30 passed the Assembly, and are pending in the Senate Committee on Energy, Utilities, and Communications.
2. AB 37 (Strickland): “Sales and Use Taxes: Exemptions: Gasoline and Diesel Fuel”: Existing law imposes a sales tax on automotive gasoline and diesel fuel. This bill would exempt those fuels from the sales and use taxes, but would require the State to reimburse local governments for local revenues lost from the exemption to the sales and use taxes (up to the 3½% portion of the sales tax rate). The bill was “held under submission” in the Assembly Committee on Revenue and Taxation due to budget considerations.
3. AB 243 (Runner): “Aircraft Jet Fuel Tax: Exemption”: Existing law imposes a sales and use tax on aircraft jet fuel, which generates revenue for State and local general, public safety, and transportation funds. This bill would exempt aircraft jet fuel sold to an air common carrier of property or persons at an airport in an enterprise zone from the sales and use tax. AB 243 would exempt aircraft jet fuel from the State General Fund portion of the sales tax (currently 4 ¾ %), but would retain the local sales and use taxes imposed on jet fuel (up to 3 ½ %). AB 243 was “held under submission” in the Assembly Committee on Revenue and Taxation due to budget considerations.
4. AB 309 (Longville): “Sales and Use Taxes: Fuel: Prepayment”: Under existing law, aircraft jet fuel is subject to the sales tax. This bill’s provisions would conform with AB 2114, Chapter 1053 of the Statutes of 2000, relating to the prepayment of the sales tax on aircraft jet fuel at the first point of distribution. Additional prepayments would be permissive if more than 75% of the gross receipts are from the retail sale of motor vehicle fuel, diesel fuel, or aircraft jet fuel. AB 309 passed the Assembly, and is pending in the Senate Committee on Revenue & Taxation.
5. AB 491 (Frommer): “Rental Vehicles: Passenger Vehicles”: Existing law provides for the terms and conditions of rental vehicles, in support of a consolidated rental car facility, or for common use by airport passengers moving between terminals and rental car facilities. This bill’s May 3, 2001 amendment states it is the intent of the Legislature to update current law regarding rental vehicles, including customer facility charges at airports. AB 491 passed the Assembly, but has not yet been assigned to a policy committee in the Senate.
6. AB 631 (Oropeza): Transportation: Needs Assessment: The May 1, 2001 amendment incorporated language from AB 411, relating to a deficiencies’ assessment of the State transportation system, which was to be completed by the California Transportation Commission, in conjunction with the regional transportation planning agencies and the metropolitan planning organizations (RTPAs/MPOs), and the California Department of Transportation. The bill included “intermodal connections and airport facilities” in the transportation assessment, to be completed every five years. The assessment would rely on, in part, “airport plans prepared by airport agencies pursuant to federal statutes, and other pertinent plans.” AB 631 passed the Assembly, but has not yet been assigned to a policy committee in the Senate.
7. AB 1382 (Liu) and SB 921 (Knight): “Space Industry Development”; SB 76 (O’Connell), SB 154 (Haynes), and SB 640 (Knight): “Sales and Use Tax Exemption: Space Flight”; and AB 1001 (Longville): “Space Industry”: AB 1382 and SB 921 would establish a space industry development program in the Technology, Trade & Commerce Agency. AB 1382’s provisions would be funded by a $1 million appropriation from the State General Fund to the “California Space Industry Fund”. SB 76, SB 154, and SB 640 generally provide for exemptions from the sales tax for property sold for use in space flight. SB 76 would expand the exemption to include property used in spaceport operations. SB 154 and SB 640 would allow material that is not intended to be launched into space to be exempt from the sales tax. AB 1001 would establish a “California Spaceport Development Zone Act of 2001”, which would authorize the Technology, Trade & Commerce Agency to establish five spaceport zones, comparable to enterprise zones, including tax incentives for economic development primarily engaged in launch related activities. The spaceport zone would be in existence 40 years, and include a financing district. AB 1382 passed the Assembly, and is scheduled for hearing in the Senate Committee on Governmental Organization on June 12, 2001; SB 921 has not yet been assigned to a policy committee in the Senate. SB 76 is scheduled for further hearing in the Senate Committee on Revenue and Taxation. SB 154 is pending in the Senate Committee on Revenue and Taxation. SB 640 is scheduled for further hearing in the Senate Committee on Revenue and Taxation. AB 1001’s hearing in the Assembly Committee on Revenue and Taxation on May 14, 2001 was postponed.
8. AB 1436 (Correa) and SB 703 (Perata and Bates): “Military Base Reuse”: Both bills are concerned with military bases in Orange County. AB 1436 would establish a housing pilot project for any base in Orange County that does not have a completed environmental impact statement by January 1, 2002. If a local military base reuse authority chooses to participate in the pilot program, 25% of the existing habitable base housing units, excluding former barracks, would be used for low-income housing. SB 703 would establish a new reuse entity for El Toro, contingent on voter approval of “The Orange County Central Park and Nature Preserve Initiative” on March 5, 2002. Composition of the reuse entity and certain planning activities are established in SB 703. AB 1436 passed the Assembly, but has not yet been assigned to a policy committee in the Senate. SB 703 is pending in the Senate Committee on Local Government.
9. AJR 9 (Runner): “Space Shuttle”: This resolution would request the President and Congress to ensure the continuation of the “Space Shuttle Modification Program” at Plant 42 in Palmdale, and other space industry objectives. AJR 9 is pending in the Assembly Committee on Jobs, Economic Development, and the Economy.
10. SB 13 (McClintock): “Sales and Use Tax: Rate Reduction”: Existing law provided for a reduction of ¼ % in the sales tax under certain positive economic conditions. This reduction took place on January 1, 2001 for one year; this bill would make the reduction permanent. The bill failed to pass the Senate Committee on Revenue and Taxation on April 25, 2001, but it was granted reconsideration. The bill’s May 29, 2001 hearing was canceled at the request of the author.
11. SB 244 (Speier): “Environmental Quality: Airport Expansion and Enlargement Projects”: This bill was significantly amended on April 5 and May 1, 2001. It would: a) Require any airport expansion or enlargement of a publicly owned airport, which needs to acquire public trust lands for that project, to have a 120-day public review period for any draft environmental impact report for that project; b) Defines “carrying out or approving a project” to include consideration of a plan for expansion or enlargement of an airport; and c) Adds language to the Public Utilities Code, where “acquisition of land” would include “public trust, tide, and submerged lands”. SB 244 is supported by the San Francisco International Airport. A bill recently introduced in Congress, H.R. 2107, would preempt states and their political subdivisions from prohibiting runway expansion projects at medium and large hub airports (there are nine in California, including Los Angeles, San Francisco, and San Diego International Airports) in the U.S. SB 244 passed the California Senate, and has not yet been assigned to a policy committee in the Assembly.
12. SB 656 (Knight): “Military Base Retention”: This bill would establish the Military Base Retention Authority Act, to include single reuse authorities for retention planning for military bases. A list of military bases in the bill include several existing aviation facilities, but does not contain any that are proposed for closure or realignment. SB 656 is pending in the Senate Committee on Local Government.
13. SB 822 (Poochigian): “County Sheriffs: Search and Rescue”: The sheriff of each county has search and rescue responsibilities. This bill would specifically include searching for persons in missing or downed aircraft. The sheriff may transfer this responsibility to another agency or jurisdiction through a written agreement. Any expense incurred in the activity would be considered a proper county charge. This bill was scheduled for hearing in the Senate Committee on Local Government, but the hearing was canceled at the request of the author.
14. SB 865 (Polanco): “California-Mexico Border Infrastructure Financing Authority”: Population growth along the California and Mexico border will lead to “escalating infrastructure deficits” by 2020, including airports. This bill would create the above authority, which would be enabled to issue bonds for construction. Projects would be revenue-generating, such as air cargo facilities. The bill passed the Senate, and has not yet been assigned to a policy committee in the Assembly.
15. SB 869 (Karnette): Department of Transportation: Airport Assessment Study”: Under existing law, Caltrans is responsible for developing a California Aviation System Plan. This bill would require Caltrans to conduct a needs assessment study on airports, including an airport inventory, capacity of airports for air traffic, projected growth of the airports, planned airport expansions, and infrastructure evaluation. SB 869 was scheduled for hearing in the Senate Committee on Transportation, but it was canceled at the request of the author. It is our understanding that SB 869 will be a two-year bill, in order to conduct additional research.
16. SB 1053 (Knight): “Centennial of Flight Program”: The Department of Education (DOE) would be required to establish a program for schools to commemmorate the 100th anniversary of the Wright Brothers’ first flight. DOE would provide information to school districts on field trips or special events. The Legislature’s intent is to have the DOE assist school districts (in grades K-12) to learn about aviation history and the science of flight. Schools are encouraged to work with the National Aeronautics and Space Administration. DOE may distribute classroom resources on the Centennial celebration. SB 1053 passed the Senate, and is scheduled for hearing on July 11, 2001 in the Assembly Committee on Education.