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The Report is abbreviated to focus on bills related to the Budget Act of 2003, and those bills scheduled for hearing on August 18, 2003. If any of the bills in prior reports become active during the one month that the Legislature is in session, we will include those in the next report. We will have two reports remaining in 2003: a) During the week of September 15, after the Legislature adjourns; and b) During the week of October 13, after the Governor has taken action on bills passed by the Legislature.

Caltrans’ Aviation-Related Legislative Update Report
Status of Selected Bills in the California Legislature
August 8, 2003   

This report is concerned with the FY 2003-04 Budget and Trailer Bills, and several other bills that are scheduled for hearing in August, after the Legislature reconvenes on August 18, 2003. 

Budget Bills:  AB 1765 is the Budget Act for 2003, and was signed by Governor Gray Davis on August 2, 2003.  While the 2003 Budget Act is not yet available, we understand that the bill, as it relates to airport grant funds, approved the transfer of $4.762 million from the Aeronautics Account to the General Fund (GF).  These funds could have been used for the annual credit of funds to General Aviation (GA) airports, matching federal Airport Improvement Program grants for GA and Reliever airports, and acquisition and development (A&D) grants for 90%-state funded airport projects.  In addition to these provisions, only $5.2 million in GA fuel tax revenues was available in FY 2002-03.  It had been projected to be $7.5 million, so there may be potentially similar decreases in GA fuel tax revenues in future FYs. 

As a result of aviation advocates’ efforts in the Legislature’s budget deliberations, SB 1048 would repeal the line item transferring the $4.762 million from the Aeronautics Account to the GF.  SB 1048 was amended in the Assembly, so the Senate will need to concur with the Assembly’s amendments before SB 1048 can be sent to the Governor.  After reconvening on August 18, the Legislature will adjourn on September 12, 2003 for the remainder of the calendar year.  If SB 1048 is enacted, and funds for airports become available, existing law distributes funds in this sequence:   

  1. Annual credits to GA airports;
  2. Matching grants for federal AIP grants; and
  3. A&D grants, using 90% state funds.

The Governor’s Mid-Year 2002-03 Budget Proposal, as reflected in SBX1 7, and his Proposed Budget for FY 2003-04, would have amended the Public Utilities Code to:

a) When appropriated by the Legislature, permanently allow the transfer of funds, for the $10,000 Annual Credits, from the Aeronautics
Account to the GF, including any funds that public entities owning the airports accumulated over a five-year period;
b) Suspend the Annual Credits for FY 2003-04; and
c) Permanently require the California Transportation Commission (CTC), in awarding any aviation grants to eligible airports, including AIP Matching and A&D Grants, to give the highest priority to security projects at GA airports with less than 80,000 annual operations.

Currently, no bill exists that would revise the distribution of airport funds from existing law, if SB 1048 restores them by amending the Budget Act of 2003.

Budget Trailer Bills:  AB 7X is the California Fiscal Recovery Act, which permits the issuance of bonds to finance the accumulated budget deficit and enacts a temporary change to the local and state sales taxes necessary to service the debt on the bond.  AB 1766 authorizes county auditors, upon receipt of sales tax information from the Director of Finance, to reimburse cities and counties for their reduction in sales and use tax revenue pursuant to the sales and use tax rate suspension in AB 7X.  Prior to the passage of the Budget Act of 2003, most county property tax funds were allocated to schools.  The Budget Act of 2003 provides for the re-distribution of property tax funds to cities, counties and schools.

 Other budget-related bills cited in previous reports are no longer relevant to the Budget Act of 2003. 

The following bills (AB 296, AB 332, AB 694, AB 920, and AB 1717) are scheduled for hearing in the Senate Appropriations Committee on August 18, 2003; SB 593 is in that committee’s suspense file, but is not currently scheduled for hearing.

AB 296 (Mullin) “Schools:  Aircraft Noise” was amended to establish an advisory group, led by the Department of Education, to evaluate the impact of aircraft noise on public schools within the 65 CNEL noise contour, and report to the Legislature by July 1, 2004.  The Division of Aeronautics, the Federal Aviation Administration, and school districts with schools located within an airport’s 65 CNEL noise contour would participate in the group. 

 AB 332 (Mullin) “Airports:  Land Use Commissions (ALUCs)” would:  a) Make school districts and community college districts subject to airport land use law; b) Require local agencies to be guided by the Airport Land Use Planning Handbook and federal aviation regulations prior to issuing a permit for renovation of an existing building, or new construction, but would not limit the authority of local agencies to overrule an ALUC; and c) Require the local agency governing body to submit specific findings of the proposed overrule to the ALUC and the Division for review and comment 45 days before the public hearing, and require the ALUC and Division to submit those comments to the local agency governing body within 30 days of receipt of the findings, for inclusion in the public record. 

 AB 694 (Levine) “Use tax:  Vehicles, Vessels, and Aircraft”:  A recent amendment reinstated the June 2, 2003 text for imposition of the use tax, comparable to the sales tax, on vehicles, vessels, and aircraft for buyers claiming out-of-state exemptions.  It would provide for an exemption for aircraft brought into California for the purpose of repair, retrofit, or modification, if the work is completed, and less than 25 hours of air time has been logged by the aircraft owner, or an agent designated by the owner who is operating the aircraft.  If more than 25 hours is logged, then the aircraft would be subject to the use tax.  The exemption would only apply to aircraft brought into the state after the operative date of the bill.

AB 920 (Nakano) “Real Estate Disclosures:  Local Government”:  AB 2776, Chapter 496 of the Statutes of 2002, established a city or county disclosure requirement for real property in the vicinity of an airport influence area, effective January 1, 2004.  AB 920 would provide, after January 1, 2005, unless a city or county adopts a different or additional disclosure form, that an “Airport Influence Area” disclosure, or if there is no current airport influence map, a written disclosure of an airport within two statute miles, would satisfy the requirement for disclosure of airports in transfers of real property.  AB 920 would require business consultants preparing a Natural Hazard Disclosure Statement to include an “Airport in Vicinity” statement in its report. 

 AB 1717 “Omnibus Transportation Bill” would:  a) Repeal two obsolete requirements:  1) Implement a "smart cockpit instrument display", and 2) Channelization of airport applications for federal capital improvement projects through the Department; b) Replace Capital Improvement "Program" with "Plan"; and c) Allow the Department to use nonfederal funds for the California Aviation System Plan's Policy and Capital Improvement Plan Elements. 

 SB 593 (Ackerman): “Property Taxation: State Assessment: Commercial Air Carrier Personal Property”: Existing law imposes taxes on commercial air carriers’ personal property in each county; the carrier is defined as “a person that operates an aircraft for any commercial purpose for compensation”.  This bill would require, beginning in the 2005-06 Fiscal Year and each year thereafter, the Board of Equalization to assess the commercial air carriers’ personal property on a statewide basis, and allocate the revenues to the tax rate area(s) in the counties in which the property is located.  The Senate Committee on Appropriations’ staff analysis of SB 593 stated:  Approximately $100 million is currently collected on the assessment of commercial aircraft (for local property tax purposes).

California Department of Transportation, Division of Aeronautics: August 8, 2003
"Italics" indicates changes from the previous report

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