BILL ANALYSIS

 

 

 

H.B. 4524

By: Martinez

Transportation

Committee Report (Unamended)

 

 

 

BACKGROUND AND PURPOSE

 

The bill author has informed the committee that there are currently no state financial structures in place to fund economic development projects for Texas' general aviation and commercial non-hub airports, which can be vital engines for local economies and provide essential services for surrounding residents. H.B. 4524 seeks to create a program to provide low-interest loans to eligible entities for the development, improvement, and maintenance of general aviation infrastructure. The bill takes this action with the goal of facilitating economic growth, improving transportation access, and promoting aviation safety within the state.

 

CRIMINAL JUSTICE IMPACT

 

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that rulemaking authority is expressly granted to the Texas Transportation Commission in SECTION 1 of this bill.

 

ANALYSIS

 

H.B. 4524 amends the Transportation Code to require the aviation division of the Texas Department of Transportation (TxDOT) to establish, implement, and administer the Texas Airport Investment Partnership Program to provide loans at below-market interest rates to encourage investment in general aviation airport infrastructure projects including runways, hangars, fueling stations, navigational aids, safety enhancements, and environmental mitigation efforts. The bill does the following in regard to a loan under the program:

·         prohibits a loan from being provided for a project limited to commercial air carrier services;

·         prohibits a loan from exceeding $10 million for a general aviation airport project and $5 million for a commercial non-hub aviation airport project;

·         requires a loan to be repaid over a term not to exceed 20 years;

·         requires a loan to require that at least 10 percent of total project costs be provided by sources other than the state and authorizes costs related to architectural, engineering, design, or development services or environmental clearances to be considered to satisfy the non-state contribution; and

·         requires a loan to be provided under an agreement that includes a recoupment provision and other terms the oversight committee established under the bill considers necessary.

The bill establishes that a project at a publicly owned airport qualifies for classification as a categorical exclusion transportation project, as defined by TxDOT. The bill establishes that an airport that has received a loan under the program may not be prohibited from imposing a passenger facility charge, rental charge, landing fee, or other service charge necessary to ensure financial sustainability. The bill authorizes the program to coordinate with a state block grant program to use federal funding and streamline project approval processes. The bill prohibits the division from awarding a loan to a project that includes an entity affiliated with or controlled by the government of China, Iran, North Korea, or Russia.

 

H.B. 4524 establishes the Texas Airport Investment Partnership Program Fund as a special fund in the state treasury outside the general revenue fund that consists of the following:

·         money appropriated by the legislature for deposit to the credit of the fund;

·         gifts, grants, and donations received for the fund;

·         investment earnings and interest earned on amounts credited to the fund; and

·         money from the repayment of loans issued from the fund.

The bill authorizes the division to use money in the fund only for the purposes of awarding loans under the bill's provisions and subjects the fund to periodic audits to ensure optimal fund management and regulatory compliance with state and federal aviation administration standards. The bill establishes an oversight committee composed of division staff appointed by the division director, with the presiding officer of the oversight committee appointed by the governor, and requires the committee to oversee the administration of the program and the issuance of loans using money in the fund.

 

H.B. 4524 requires an eligible political subdivision, defined by the bill as a county, municipality, airport authority, or other local governmental or nonprofit entity authorized to own or operate a general aviation airport, that requests a loan under the program to submit to the oversight committee an application detailing the scope, estimated costs, timeline, and anticipated benefits of the project for which a loan is requested. The bill requires an application to demonstrate the applicant's ability to repay the loan through airport revenue, local tax revenue, or other funding sources and to be evaluated by the oversight committee with respect to the economic impact, feasibility, safety improvements, and long-term sustainability of the project. The bill requires the oversight committee, in awarding loans, to give priority to projects that support general aviation airports, enhance safety, promote economic development, or incorporate federal-private partnership models. The bill requires a loan recipient to submit to the division an annual progress report that details the expenditures, project milestones, and financial performance for a project for which a loan was provided. The bill requires the oversight committee to conduct periodic audits to ensure compliance with loan agreements. The bill establishes that a loan recipient that does not submit a report as required or is found to be in noncompliance with the terms of a loan through an audit may be subjected to penalties as provided by the terms of the loan agreement, including increased interest rates, modified repayment terms, repayment acceleration, or revocation of program participation rights.

 

H.B. 4524 requires TxDOT to conduct a biennial review of the effectiveness of the program that assesses loan performance, infrastructure improvements, and economic impact and requires the review to be included in the division's capital improvement plan and summarized, made publicly available, and submitted to the legislature. The bill authorizes the Texas Transportation Commission to adopt rules necessary to implement the bill. The bill requires the oversight committee to begin accepting applications for loans issued under the bill's provisions not later than September 1, 2026, and to begin issuing loans not later than March 1, 2027.

 

EFFECTIVE DATE

 

September 1, 2025.