MINUTES OF THE
SENATE Committee on Transportation
Seventy-First Session
March 15, 2001
The Senate Committee on Transportationwas called to order by Chairman William R. O'Donnell, at 2:33 p.m., on Thursday, March 15, 2001, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator William R. O'Donnell, Chairman
Senator Lawrence E. Jacobsen
Senator Maurice Washington
Senator Raymond C. Shaffer
Senator Terry Care
Senator Maggie Carlton
COMMITTEE MEMBERS ABSENT:
Senator Mark Amodei, Vice Chairman (Excused)
STAFF MEMBERS PRESENT:
Donald O. Williams, Committee Policy Analyst
Alice Nevin, Committee Secretary
OTHERS PRESENT:
Stacy Howard, Lobbyist, Aircraft Owners and Pilots Association
James T. Braswell, Lobbyist, Nevada Airport Managers Association Incorporated, and Douglas County
Jeff Fontaine, Deputy Director, Nevada Department of Transportation
Bob Thomas, Carson City Airport Authority
David Corrao, Chairman, Carson City Airport Authority
Wendell R. (Ray) Alcorn, Captain-Retired, U.S. Navy, Lobbyist
F. Alex Ortiz, Lobbyist, Clark County
John P. Sande III, Lobbyist, Airport Authority of Washoe County
Hale Bennett, Concerned Citizen
Chairman O’Donnell:
I will open the hearing on Senate Bill (S.B.) 26 and ask Senator Jacobsen to serve as acting Chairman.
SENATE BILL 26: Creates fund for aviation. (BDR 44-696)
Senator Bill R. O’Donnell, Clark County Senatorial District No. 5:
A constituent requested S.B. 26. This bill would create a trust fund for airport administration within the Nevada Department of Transportation (NDOT). It allows the funds to be used for matching funds to the federal government on a 90-10 (90 percent to 10 percent) match. Nevada is the only state without a program of this nature.
Stacy Howard, Lobbyist, Aircraft Owners and Pilots Association:
I am the Western Regional Representative of the Aircraft Owners and Pilots Association (AOPA). There are 365,000 members in the United States and 4000 members reside in the state of Nevada. This group is dedicated to preserving and improving the aviation system nationally and in Nevada. Airports are on-ramps to the nation’s air transportation system and play a vital role in the local economic picture. They provide a direct conduit for infusing outside dollars into the local community.
Nationally, general aviation, which is all aviation outside of scheduled commercial travel and the military, employs more than 637,000 individuals earning more than $19 billion in salaries. A recent study showed the Yerington Municipal Airport generated $1,645,000 in direct economic output for a total economic impact of over $3 million in that community.
Every dollar local communities invest in airport improvements can generate over $9 in additional federal funding. Many light industrial and manufacturing firms, agricultural, mining, livestock businesses, and banks depend upon airports, especially rural airports, for transporting time-sensitive parts, materials and documents. Rural communities cannot hope to attract new technology and industry without a well-maintained airport.
Airports also improve the quality of life for local citizens. United Parcel Service, Federal Express and Airborne Express companies contract with the smaller independent operators to pick up and deliver packages and bank transmittals in Ely, Elko, Carson City, Winnemucca, and Tonopah. One company, Ameriflight, delivered over two million pounds of cargo to Nevada’s rural airports in 2000.
In addition, the Nevada Highway Patrol Division uses it for law enforcement. The Nevada Highway Patrol Division flew over 1500 hours last year between rural airports such as Carson City, Elko, Wells, Yerington, Hawthorne, Beatty, Alamo, North Las Vegas, Ely and Winnemucca.
Ms. Howard:
Air ambulance companies transport patients, donated blood and organs from rural airports to trauma centers and major medical facilities. Angel Flight, a volunteer group, flew 81 missions in Nevada last year. They took patients to specialized care facilities in Los Angeles or San Francisco, and transported child cancer patients from Minden, Ely, Carson City, Battle Mountain, Elko, and Winnemucca to special youth camps in California and Arizona. Our rural airports are very important to the quality of life for the citizens of this state.
Who pays for Nevada airports? Day-to-day airport operations are generally supported through fuel-flow fees, transient parking fees, and tenant rates and charges. A few counties have also implemented local fuel taxes that are dedicated to aviation use, but these revenues are not sufficient to support needed capital improvements on the airports. Large, commercial-service airports are approved by the Federal Aviation Administration (FAA) to collect passenger facility charges; they also have parking lots, restaurants, and other types of tenants who supplement airport income. Large and medium-size communities have the option of issuing bonds secured by future PFCs (passenger facility charges) and auto parking lot revenue. In all cases, however, airports without large commercial service must compete with other community programs to receive general fund appropriations for capital improvements and pavement preservation.
A total of 54 Nevada airports were identified in the 1995 Nevada State Airport System Plan (NSASP). Of these, 32 are eligible for federal assistance under the National Plan of Integrated Airports Systems (NPIAS). Airports qualified under NPIAS compete for a share of airport improvement program funds through a grants application process. The approved capital projects may be funded at about 90 percent and must be matched by a 10 percent local share. In NDOT’s 1995 study, over $900 million in capital improvement needs were identified over a 20-year planning period. About 70 percent of those were for commercial service airports and the remainder, $300 million, was evenly divided between reliever airports (airports in the metropolitan areas that help take pressure off the commercial service airports) and general aviation airports. To adequately serve business and general aviation users, airports should provide airport lighting, precision-landing approach aids and automatic weather observation systems. According to pilot surveys conducted as part of NSASP, many Nevada airports lack even basic services such as public restrooms and 24-hour telephones.
The NSASP plan also identified the need for NDOT to work more closely with individual airport sponsors, providing encouragement and technical assistance to assure airport development, pavement preservation programs, height zoning, and comprehensive land planning.
Ms. Howard:
When requesting Airport Improvement Program Temporary Extension Act of 1994 (AIP) funding from the FAA, airport sponsors usually apply for projects that they believe are most likely to be approved under the program. Actual airport needs are routinely much higher than these requests. In 1999, Nevada’s airport applications for FAA funding totaled about $100 million and general aviation’s share was $6.75 million. While grants to commercial service airports and relievers met 60 percent of the requests, and grants to reliever airports satisfied 64 percent of requests, general aviation rural airports received only about 40 percent of the funds requested. Airport Improvement Program Temporary Extension Act of 1994 grants for Nevada’s general aviation airports totaled $2.76 million in 1999, leaving $3.98 million in unfunded requests.
The problem often is “no match.” If the communities have no local match, they do not make an application. One result of this problem is a bill passed nationally to increase airport funding over the next several years which actually sets aside $150,000 in entitlement money for each rural airport. In Nevada, 10 airports did not take enough money from the FAA to receive all of the $150,000 per year.
I think the Nevada Legislature is in an ideal position to research the needs of Nevada airports and to recommend a plan of action to address those needs at the state level. The Legislature has the background, the staffing and the vision to examine the economic benefits of general aviation airports and to allocate appropriate state resources to implement a plan for the future. Aviation is not special interest. It benefits every citizen, whether you fly or not. The AOPA supports S.B. 26 as an excellent vehicle by which the state of Nevada can take a proactive role in the preservation and development of our air transportation system. It augments and supplements the FAA’s program without disrupting the individual airport sponsor’s current relationship with the FAA Office of Airports division. We build a mile of highway, we can go one mile; we build a mile of runway, we can go anywhere.
Senator Washington:
In the bill, the assistant director is allowed to use the funds for construction, enlargement and improvement of operations. Would that be throughout the state, specifically geared towards McCarran (McCarran International Airport) or Reno/Tahoe International Airport, or apply to the smaller airports such as Carson City (Carson City Airport) or Elko (Elko-J. C. Harris Field)?
Ms. Howard:
That would apply statewide. This particular bill does not actually appropriate existing funding; it just creates the mechanism for a fund. Later the Legislature can decide where the money for the fund will come from. The program would fund all Nevada airports within the system plan.
Senator Washington:
The counties run most airports. The counties make their appropriations and purchases as far as land, distribution, concourse, and so forth, so the state would not assume that role. The state would aid those counties in the operation, maintenance and enlargement of those airports.
Ms. Howard:
That is correct. The state would augment the FAA program or set up a program whereby the state could help the local airport to make those improvements. The state would not take over the role of deciding which improvements need to be made, although the state would have a priority system in place as to where those monies would go.
Senator Washington:
It would be like our current highway system. If this bill passes, I am assuming you would allow a position from the state, the assistant director or the director of transportation (NDOT), to sit in on the commission or airport authority involved in those decision-making processes. The McCarran International Airport is governed by the county commissioners (Clark County Board of Commissioners); the Reno/Tahoe International Airport is governed by the airport authority (Airport Authority of Washoe County). We are talking about funds that may be appropriated from the state. Will the state have an opportunity to be a part of the governance of those funds?
Ms. Howard:
I believe the state’s role would only be distribution of the money. It would not necessarily gain a seat on an advisory board or a task force or something at county level.
Chairman O’Donnell:
The idea is to generate additional funds so the federal government can be approached to acquire more funds for mostly the rural airports. The major airports in the state already have the mechanism by which they can go direct; however, this bill may be a vehicle to use for the coordination efforts of different airports to get together and pool their money for a certain approach or certain piece of equipment. I personally see this as a communications tool for all airport managers and associations to get together and talk about their funding needs. There may be some other mechanism whereby we could fund this fund, but that may be in another hearing.
Senator Washington:
My focus was on the aspect of governance and making some necessary decisions. The airport is the lifeblood of Washoe, Douglas, and ChurchillCounties and this area needs that expansion.
Chairman O’Donnell:
I think that is a key aspect of the success of the Reno area, having their air carriers disperse so there are many carriers, not just one carrier. However, passengers are needed and in order to get the passengers, you need airport access to the public. This bill can take on different shapes and sizes and abilities if people would just work together. I am personally not stuck on anything in this bill, but I am interested in seeing something passed. Then we can collectively agree on what needs to be done for our airports and move forward. Nevada is a very rural state, but the census has proved we are getting more and more people here. We have to get more and more sophisticated in what we do. Even the rural airports need to increase their capabilities. That was my reason for supporting the bill.
Senator Care:
Occasionally you will read where someone has died and left $5 million to the federal government to be applied to the deduction of the national debt. This bill (S.B. 26) creates a trust fund. What would happen if someone died and left $100,000 to the airport in Tonopah or for the administration of rural airports in Nevada? Where would that money go?
Ms. Howard:
I do not know what kind of mechanism might be in place at this time.
Senator Care:
When I saw the language of “trust fund” in S.B. 26, section 1, subsection 1; and “gift, bequest, grant, appropriation or donation” in section 1, subsection 1, paragraph (b), that is the reason I raise this question. People do things like give their money to the United States Treasury and it might actually require legislation like this.
Senator Jacobsen:
Do you have any local airport associations? If an organization is in place, it could do great things.
Ms. Howard:
We currently have the Nevada Airport Managers’ Association (NAMA) and we would be very happy to work with NDOT to help set up this program. Also, NDOT has an aviation advisory committee (Nevada Aviation Technical Advisory Committee [NATAC]) in place that could be used as a resource as well.
Senator Jacobsen:
Would you provide us with a list of the members of the NDOT aviation advisory committee?
James T. Braswell, Lobbyist, Nevada Airport Managers Association Incorporated, and Douglas County:
I am President of the Nevada Airport Managers’ Association. We have a conference in Minden today with 52 individuals in attendance from all over the state. Some members are attending this meeting today.
The Nevada Airport Managers’ Association (NAMA) and Douglas County support S.B. 26 because the bill sets up the administration of an aviation fund. This is very important because rural airports need many improvements to pavement and facilities. This could be an avenue to encourage economic development throughout the state. I offer NAMA’s assistance on this. We will put forth our best energy to make this work.
Senator Jacobsen:
Is there a model in any of the western states?
Mr. Braswell:
Yes, NAMA looked at Utah and New Mexico. New Mexico was funded at 90 percent, the state funded 5 percent, and the local governing organization funded 5 percent. I would like to offer a correction: the federal government offered the State of Nevada 93¾ percent with a match of 6¼ percent.
Senator Jacobsen:
The Douglas County Airport (Minden-Tahoe Airport) has had quite a bit of controversy because of the weight limit. Do you adhere to a weight limit?
Mr. Braswell:
Yes, Douglas County, by voter initiative, adheres to a weight limit of 30,000 pounds for single wheel and 50,000 pounds for dual and multiple wheels. There are exceptions such as the fire bombers and military aircraft or aircraft that are emergency status.
Jeff Fontaine, Deputy Director, Nevada Department of Transportation:
I have brought Dennis Taylor, who is in charge of the NATAC within NDOT. With a minor amendment, NDOT could support the bill. This bill has potential benefit for Nevada’s airports, particularly in the rural areas. We recognize the importance of the rural airports for the quality of life and economic development in this state. Nevada Department of Transportation’s role in the aviation business is: we provide and prepare aviation plans and airport plans; we inspect airports; and we prepare economic impact reports for individual airports. Some of the reports point out the economic benefits of Nevada’s airports.
This bill establishes a mechanism for a trust fund; there is no identified funding source and NDOT does not have a funding source. The speakers today have indicated this is simply a start and an opportunity to get the parties together to talk about Nevada’s airport needs. There may be some benefit to providing a match for federal funds for projects, perhaps, some rural counties might not be able to obtain. I am not sure how that might work. I heard Senator Care’s idea that a gift to a trust fund, for example, could be used to provide the match.
The Nevada Department of Transportation would like to see one change in the bill: in sections 1, 2, 3, and 5, give the director of NDOT the responsibility of administering this fund. This is consistent with the way the other trust funds are administered by NDOT. The director is responsible for the entire department and this fund should be administered at the director’s level. By making this change, NDOT could support this bill.
The department does have maps that show where the airports are located.
Chairman O'Donnell:
This bill is a tool to get people together.
Mr. Fontaine:
Yes, that is right.
Bob Thomas, Carson City airport Authority:
I am appearing today as a member of the Carson City Airport Authority. I have brought David Corrao, Chairman, Carson City Airport Authority; and Captain-Retired Ray Alcorn, U.S. Navy, a member of the Carson City Airport Authority. Collectively, we represent a lot of years in aviation. I have been flying for 60 years and Captain Alcorn is the former commander of the Fallon Naval Air Station. Between the three of us, we have been associated with aviation for quite some time.
There are two things that bother me about the bill, but I cannot speak for the entire Carson City Airport Authority. We were unable to take this issue up at our last board meeting, as it could not be added to the agenda in time. I would like to note we are speaking independently of each other.
I do not see how the establishment of this trust fund will raise any more funds than are being raised today through jet-fuel taxes. Presently, I understand all of the airports get back the jet-fuel taxes generated. Also, S.B. 39 is slightly in conflict with this bill, because Reno (Airport Authority of Washoe County) is asking to use their jet-fuel tax for publicity purposes to promote their airport. This is not one of the uses authorized by the Nevada Revised Statutes (NRS).
SENATE BILL 39: Expands purposes for which proceeds of certain taxes on fuel for jet or turbine-powered aircraft may be used by governmental entity. (BDR 32-789)
Mr. Thomas:
I do not think Reno would want to volunteer money into this fund, I do not think we would want to volunteer money into this fund. As an old legislator, I envision 2 years from now the proponents of this bill saying nobody volunteered any money into our fund; therefore, you are going to have to make it mandatory. That really concerns me.
Carson City Airport is not a wealthy airport. We have no airline service and we cost our citizens zero dollars. We have no tax dollars to support the airport other than personal property taxes on aircraft and improvements on the buildings from the leaseholders. We generate all of our funds. We have volunteer services from the seven members of the board. We do not have an expensive airport manager; we have a secretarial-functioning airport manager. Of the seven members of the Carson City Airport Authority, three or four are available at all times to take care of whatever needs to be taken care of at the airport, so we do not cost the city any money.
The second question about the bill is what are the ground rules for granting the money to the airports? Who makes the decisions as to who gets what and when? What are the criteria for determining which airport gets a grant ahead of other airports also seeking grants? Senate Bill 26 grants too much power to one person or group.
David Corrao, Chairman, Carson City Airport Authority:
I have listened to Ms. Howard’s testimony. Her arguments are valid for rural airports that are trying to generate enough money to substantiate matching funds for airport maintenance.
In Carson City, we have a very ambitious program with a new master plan that will cost several million dollars. Every penny of everything we generate within our boundaries needs to be put towards the matching grant fund; therefore, the Carson City Airport would not be a viable entity to contribute any money for at least the next 5 years. Would that make Carson City ineligible should a fund be created for disbursements of any funds in the future?
Because this bill is written fairly loosely, I understand it is the beginning of the making of a tool, but every tool that has a purpose has instructions with it as to how to use that tool. I do not see that reflected in S.B. 26. I see the creation of a fund but no information about how the fund will be administered. This bill seems to create another level of management for funds we are still receiving at this time. I see the mechanism for generating funds for this entity as being very miniscule and or not available at all. If we create an entity that is not getting funds, although it may be a very honorable idea, sometimes that level of honorable intention lends itself to things ahead that are not so honorable. The small airports require every penny they generate to maintain their own airports.
Chairman O'Donnell:
I believe the bill tells how the money would be allocated. If there was money in the trust fund, it would be allocated according to section 3, paragraph (a) of the bill.
Mr. Corrao:
I was referring to the priority list.
Chairman O'Donnell:
It does leave that up to the assistant director or director.
Mr. Corrao:
All of the airports have direct access to the FAA; they delineate their grant funds for capital improvement and maintenance projects, so the mechanism is already in place. This bill creates another level of management between what already exists. I understand the trust is to allow money to come into the rural airports and that is a great idea.
Senator O’Donnell:
You said Carson City does not have any money to put into the fund. Does that mean they would not be able to share in the funds that might come back from the federal government? How much money could you get from the federal government if you did not match it today?
Mr. Corrao:
We have put together a capital improvement program for the airport. We know the funds needed to do the project and we know what our matching fund will be. We have created the monies available for that funding. Every dollar generated within the boundaries of the Carson City Airport has to go towards this matching fund. During this period, there is no discretionary money to be applicable to a trust fund for airports as a whole within the state of Nevada.
Chairman O'Donnell:
Do you get matching funds for the money you raise in the capital improvement fund?
Mr. Corrao:
Yes. At this time it is 6¾ percent with 93¼ percent back.
Wendell R. (Ray) Alcorn, Captain-Retired, U.S. Navy, Lobbyist:
I am appearing as a member of the Carson City Airport Authority. I would like to tighten the guidance and direction of this bill. I question how the bill would be implemented and how the funds would be disbursed. We are looking at the allowance of taxes generated from aviation-fuel sales. This is one of the sources of money at the Carson City Airport which can be applied toward the federal airport improvement program grants. This bill has no funding source and I can foresee the day, if the new fund does not have the money it needs, people will start looking at the taxes generated currently used at the airport. Those funds could be taken away from the hands of the locals who are running the airport and put into the hands of state officials. Those officials could require local airports to apply for the funds without any idea of whether we would be able to use them or not. Most of our taxes are best spent at local levels and I feel that is what we are doing in Carson City. I think it is a good plan but I am not sure we need the assistance of the state to help us in our decision-making.
Senator Care:
Two words were used during the previous testimony: priority and competing. How many competing airport authorities do we have in this state? When I first read the bill, I thought of rural airport authorities; but there is nothing that says the McCarran International Airport would not be contemplated in this bill.
Mr. Corrao:
I believe there are three airports with airport authority boards, but all 52 airports would be competing.
Chairman O'Donnell:
I believe there would be 52 airports working together instead of 52 individual airports trying to vie for federal money.
Mr. Thomas:
As long as there is a good master plan, we have had no trouble getting money from Washington, D.C. The problem is matching funds of our own generation. We plan 4 or 5 years ahead and start saving but we need every dollar we generate at the Carson City Airport.
Chairman O'Donnell:
Is there someone here from Clark County? Can you tell us what your match is? You do this directly with the FAA, I believe.
F. Alex Ortiz, Lobbyist, Clark County:
I do not have that information but I will provide it for the committee. Clark County is neutral on this bill.
John Sande III, Lobbyist, Airport Authority of Washoe County:
We are neutral on this bill. Our concern would be if there were pressure put on the airport authority to make a contribution. We understand from the testimony the smaller airports can perhaps utilize this fund. I want to clarify, for the record, on line 22 (section 2, subsection 2 of S.B. 26) the bill drafter said, “The money so received must be used by the governmental entity . . . .” I assume the addition of the word governmental was just language cleanup because, technically, the airport authority is a governmental entity in Washoe County although we are called a quasi-municipal organization.
Senator Washington:
Testifiers from Douglas County and Carson City have said the 52 airports in this state would have to compete against one another for money from this collective fund for the operation, maintenance, or expansion of their respective airports. Does Washoe County feel like it would have to compete as well?
Mr. Sande:
Washoe County would probably not be contributing money to this fund and would not be seeking the funds. We do get some jet-fuel tax under the statutes but we have not proposed doing the optional 4-cent jet-fuel tax such as there is in Clark County. Currently there is a bill before the Senate taxation committee (Senate Bill 39) which would allow the jet-fuel tax, if imposed by the county, to be utilized for the promotion of airlines.
Senator Washington:
I thought this bill would be a caveat to expand airport services at the Reno/Tahoe International Airport.
Mr. Sande:
This bill is more for construction and improvement in operations. The present board believes if an additional jet-fuel tax were imposed, it would be used and a match from the federal government would be sought, so there would not be a contribution to the aviation trust fund. If this bill passed, the aviation trust fund would be primarily designed for smaller airports.
Hale Bennett, Concerned Citizen:
I want to correct an earlier statement. There are 52 airports in the state, but only 33 airports are eligible for federal funding and have the need for this matching grant. The other airports are private airports that are not eligible for the funding.
I disagree with some of the previous testimony. Some airports do not want to share any revenue with the smaller airports. That is a problem for the smaller airports. People have flown in to the Silver Springs Airport to practice landings for 55 years, yet they have not contributed a dime to the airport. Somebody should get some assistance from some source, somehow, for a matching grant to maintain that airport. The purpose of this bill is to help the small, public-use airports that are not funded. The plea is for assistance from this committee and the Legislature to do something about the funding for small, unfunded airports in the state of Nevada.
Chairman O'Donnell:
Do you own the Silver Springs facility privately?
Mr. Bennett:
The Silver Springs Airport is owned by Lyon County; however, Lyon County has not had the money to develop it. My wife and I started a small company and we obtained a 50-year lease to operate the airport. At this point, we are progressing with it: we have one hanger, a mobile home watchman quarters on-site, and we have a grant from the FAA to pave part of the runway. Matching funds in this instance came from a Community Development Block Grant, but it was a one-time shot. We are a publicly owned airport, and do qualify for an FAA grant, but we are unable to match the grant.
Chairman O'Donnell:
I would assume there would be a meeting of people interested in this subject, both for and against, and perhaps some language could be crafted that would suffice to make this a better bill. I introduced this bill on behalf of the AOPA and it is a good start for something that could be wonderful in the future, but there are some concerns and they need to be addressed. I charge you to work together to find a solution.
Senator Jacobsen:
I would like to see a map of the airport boundaries for each airport.
Ms. Howard:
A directory of Nevada airports has been published by NDOT and a copy can be provided to the committee.
Chairman O'Donnell:
There being no further business, the meeting is adjourned at 3:42 p.m.
RESPECTFULLY SUBMITTED:
Alice Nevin,
Committee Secretary
APPROVED BY:
Senator William R. O'Donnell, Chairman
DATE: