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Congress Sends Aviation Bill to President; House, Senate Strongly Approve Three-Year $40 Billion Plan

By Kevin McCarty
March 20, 2000


The U.S. House of Representatives March 15 voted 319-101 to approve a $40 billion investment plan for the nation's aviation system, with the measure now heading to President Clinton for his signature. The Senate acted on the legislation, the "Aviation Investment and Reform Act for the 21st Century" (H.R. 1000) on March 8, voting 82-17 for three-year legislation which substantially increases federal funds for airport construction and programs of the Federal Aviation Administration (FAA).

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Conference of Mayors President and Denver Mayor Wellington E. Webb praised Congressional leaders for their work on the legislation, known as "AIR-21," emphasizing how these additional funds will help the nation's airports meet continuing growth in passenger travel and air cargo. "In cities like Denver, Atlanta, Chicago and other cities all across the nation, we can now capture the full benefit of the federal aviation dollars now collected from the traveling public and others in the form of increased investment at our airports."

Webb added further that "This agreement is not just about making sure these dollars are spent on aviation needs, it is about building a safer and more efficient national aviation system for the 21st Century."

Webb, who has worked closely with House Transportation and Infrastructure Committee Chairman Bud Shuster (PA) and other leaders in the Congress, expressed the appreciation of the Conference and its members for their work on AIR-21. "The nation's mayors applaud the leadership of the many leaders in the House and Senate who crafted this agreement and in the process have strengthened our commitment to the nation's aviation system," he said.

Enactment of AIR-21 is one of the Conference's top legislative priorities for the 106th Congress. Webb had also made a call for increased aviation investment part of his "Agenda for America's Cities" that was presented at the Conference's 68th Winter Meeting.

As chair of the Conference's Transportation and Communications Committee, Atlanta Mayor Bill Campbell, who led the mayors' efforts over the past two years to secure enactment of the legislation, praised the many leaders in Congress for their work on AIR-21. "This investment in our nation's airports and aviation system will help secure our future economic prosperity," Campbell said. Campbell, who oversees the world's busiest passenger airport, joined with Tulsa Mayor M. Susan Savage earlier this month before a House panel to urge Congressional action on the legislation.

Investment in Airports to Rise
Among the many new benefits of the legislation will be an increased commitment to airport investment, which according to many studies and reports has been lagging behind what is needed to keep pace with the growth in passenger travel and air cargo. Airport investment will be supported in two ways in the bill. First, AIR-21 substantially increases in funding for the FAA's Airport Improvement Program (AIP), jumping the current funding level of $1.85 billion to $3.2 billion in the next fiscal year.

This increase in AIP funding means that next year entitlement grants to the nation's 'primary' airports (airports with 10,000 or more passenger per year) will double, funds available to cargo airports will double, and additional funds will be available for discretionary grants for airport improvements and noise mitigation. Other changes in the AIP program will strengthen the national system by delivering minimum funding to smaller airports. The AIP program funds airport construction, runways, noise mitigation and other elements of local airport capital plans.

Local Fee Authority Expanded
In addition to the increase in AIP funding, local airports will receive new authority to increase Passenger Facility Charges (PFCs) to fund airport capital needs. Airports will be authorized to raise PFCs from the current capped level of $3 per passenger per airport (maximum of $6 on a one-way ticket/$12 on a round-trip ticket) to $4.50 per airport (new maximum of $9 one-way/$18 round-trip). While this authority is available to all airports, it is expected that the larger ones are most likely to use this new authority to use higher use fees to raise additional funds locally for their capital needs. Under the legislation, however, any airport that wants to use this new PFC authority must first secure a finding by the U.S. Department of Transportation that available AIP funding can't meet the airport's capital needs.

Capital Funds Assured
One of the central issues in the debate between House and Senate conferees was the level of commitment to future funding for FAA's programs, particularly the capital accounts. The House conferees, led by Chairman Shuster and Ranking Member Jim Oberstar, were seeking the strongest assurances, and even guarantees, of future funding levels. This is among the key messages he delivered in his remarks to the mayors during the Conference's 68th Winter Meeting in January. In reaching an agreement, House leaders settled on a compromise with the Senate negotiators, who had strongly resisted any guarantees of spending levels, that would presumptively fund the two capital accounts of the FAA's budget, specifically the AIP program and the agency's Facilities and Equipment program. AIR-21 directs that aviation revenues accruing to the Aviation Trust Fund would be spent, first fully funding these two capital accounts. A future Congress could seek a majority vote to undo these commitments over the next three years, but any transportation appropriations measure would be subject to specific votes to overturn this commitment of resources to the capital accounts. Finally, in agreeing to the legislation, House Transportation leaders received the assurances of their leadership that these programs would be funded at the levels set forth in the legislation.

This predictability in future funding levels, both for AIP entitlement grants and for AIP discretionary funding commitments, is extremely important to local airports, particularly those who are undertaking major capital projects. Service Expanded/Competition Promoted While increased capital funding will help many airports increase capacity to promote more competition, AIR-21 includes a number of specific provisions to help communities with underserved airports improve service and lower air fares. The agreement directs U.S. DOT to establish a new pilot program, up to 40 communities nationwide, whereby the agency would work with underserved airports to improve air service. This program is limited to non-hub or small hub airports that meet certain criteria.

The bill also established a new incentive program to improve jet service to underserved markets by assisting commuter airlines in purchasing regional jets. Participating carriers that receive assistance in the form of secured loans, loan guarantees, and other credit support for the purchase of equipment would be required to provide service to underserved markets. Finally, it makes changes in slots rules at certain airports to increase access and promote more competition.

Aviation Safety/FAA Reform
AIR-21 includes numerous provisions to increase airline safety. Foremost are provisions to increase the budget for the FAA's Facilities & Equipment program (see chart) by nearly 50 percent, additional resources that will help the agency modernize its air traffic control system. The agreement also increases funding to the FAA for more controllers and other personnel, as well as to retrain existing employees, to ensure the safety of the aviation system. Certain safety investments, like wind shear detection devices, are made eligible for AIP funding. The legislation will also require cargo airlines to install collision avoidance systems on their aircraft.

Finally, the legislation includes numerous provisions affecting the operations and activities of the Federal Aviation Administration. One such change is the establishment of a new management board, a new body that will be charged with overseeing the air traffic control modernization program. House, Senate Debate Focuses on Bill's Benefits Speaking during House debate on the agreement, Chairman Shuster said, "The greatest aviation system in the world is hurdling toward gridlock and potential catastrophes in our skies, and this bill will make those skies safer, reduce flight delays, and increase competition by modernizing our air traffic control system and improving our airports."

Representative James L. Oberstar (MN), the Ranking Minority Member of the House Transportation Committee, talked about what AIR-21 means to the nation. "AIR-21 begins to address the needs of our aviation system. This bill will ensure that the attention and focus our interstate highway system has received over the years is extended to aviation. As DOT Secretary Slater has said: 'Aviation will be to the 21st Century, what the Interstate was to the 20th.' As we did in the 20th Century, it is time to meet the challenges of the new Century," he said.

Citing the importance of the legislation to the economy, a point often emphasized by the nation's mayors, House Aviation Subcommittee Chairman John J. Duncan, Jr. said, "Aviation is the cornerstone of our nation's economy. Everyone, even people who never fly, benefit from a strong aviation system."

During his remarks, Shuster also discussed the provisions allowing local airports to increase PFCs. "We are returning to local government, to local elected airport authorities, this decision. It is not a decision being made here in Washington. It is one that lets them make that decision. Beyond that, these standards should allow the FAA to process PFC applications expeditiously with first undertaking a lengthy rulemaking," Shuster said.

Senator Slade Gorton (WA), who led the Senate effort on the bill as chair of the Aviation Subcommittee, also spoke to the PFC provisions during the Senate floor debate. "Another provision which will stimulate competition and help bridge the funding gap that currently exists is an increase in the cap on the passenger facility charge. This provision gets to the heart of my guiding philosophy, which is to give local officials more decision-making power," Gorton said.

Another Senate aviation leader, Sen. John D. Rockefeller IV (WV), expressed the need for the legislation in this way. "We have fallen behind. Unless we get started immediately in the effort to modernize our air traffic control system, to fix our airports, we stand a very good chance of new being able to catch up, never catching up to the curve, much less getting ahead of it."

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