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House Panel Clears $89 Billion Aviation Investment Plan
Committee Chair Shuster Says AIR 21 is, "Right Thing to Do"

By Kevin McCarty

The House Transportation and Infrastructure Committee voted unanimously to send its $89 billion, five-year aviation renewal of the nation’s aviation law to the full House, providing substantial increases in federal commitments to airport capital needs and the operations of the Federal Aviation Administration (FAA).

Committee Chair Bud Shuster, who introduced the legislation - the "Aviation Investment and Reform Act for the 21st Century" or AIR 21 - with the bipartisan backing of panel leaders, said, "The right thing to do is pass the legislation before us." The action sets the stage for the larger debate among House and Senate leaders on how the federal budget plan will accommodate the increased spending commitments under the bill, a strategy that parallels Chairman Shuster’s effort last year on TEA-21 for highway and transit investment.

"AIR-21 is an appropriate title, because it does for aviation what TEA-21 did for highways and transit: it unlocks the aviation trust fund so that the money paid by the flying public into the Aviation Trust Fund is actually invested to make our aviation system safe and efficient," Shuster said in describing the legislation.

Emphasizing the bill’s impact on the aviation industry, Shuster said, "This bill will make our skies safer and inject a healthy shot of competition into the airline industry."

In advancing the case for substantially higher funding levels in support of FAA’s programs and local airport investment, Shuster pointed out that unless Congress starts spending funds accruing to the Aviation Trust Fund, unspent balances will reach nearly $100 billion. "Passenger travel is expected to grow from 655 million passengers in 1998 to more than one billion by 2010," Shuster said, adding that "27 airports already experience more than 20,000 hours in flight delays annually."

He also explained that FAA system outages are a major cause for concern, noting that in 1998 there were more than 100 significant outages (those lasting more than 10 minutes) where air traffic controllers lost some or all of their primary systems, the means by controllers track aircraft location and flight information.

Describing how investment at airports helps competition, Shuster said "Capacity is the key to competition. We must make room for new entrants and expanded service or air fares will put air travel out of the reach for many Americans."

The legislation deals directly with the key objectives outlined by the Conference of Mayors during its recent Winter Meeting, in discussions of the Transportation and Communications Committee led by Atlanta Mayor Bill Campbell. These elements of a renewal bill, as further reviewed last month at the Conference’s Key West Leadership Meeting, include: increased funding commitments to the Airport Improvement Program, including continuing emphasis on noise mitigation and other current eligibilities; increased authority to airport operators to fund capital needs from Passenger Facility Charges (PFCs); and dedication of airport passenger tax revenues and other related sources to aviation program needs.

The AIR 21 bill, H.R. 1000, passed the Committee on March 11, just two days after the Aviation Subcommittee, chaired by Rep. John J. Duncan, Jr. (TN), approved the legislation unanimously. Duncan, joined by Committee Minority leaders, Reps. James L. Oberstar (MN) and William O. Lipinski (IL), sponsored AIR 21 with Chairman Shuster.

What AIR 21 Does

The legislation dramatically increases the funding commitments to the Airport Improvement Program (AIP), raising the current funding authority from $2.4 billion to $5 billion for each of the next five fiscal years. Actual funding for the AIP program is $1.95 billion, with one-half of these funds withheld until a new aviation law is enacted.

Under current law and continued under AIR 21, a portion of the AIP funds are distributed by formula to each of the nation’s "primary airports." Annual formula grants will increase from $519 million currently to $1.56 billion annually.

AIPÕs set-aside of discretionary funds for local noise mitigation efforts will continue, but its share of a larger program means that current funding of $200 million will increase to $600 annually.

To the extent AIP funds are not sufficient to meet capital needs of specific areas, airport operators, subject to a U.S. Department of Transportation review and approval, can increase their PFC to $6 per passenger, up from the current cap of $3 per passenger.

With the increased spending provided by the legislation, a new program - the Aviation Systems Accelerated Program (ASAP) - to attack congestion and delays at airports is authorized at an average of $2 billion annually. These funds are intended to go directly to projects that are ready to go forward, such as runways and better radar systems.

FAA’s two core programs for Operations and Facilities and Equipment (F&E) are slated for significant increases as well, with Operations funding of $5.57 billion increasing to $8.76 billion by Fiscal Year 2004 and the F&E program growing from about $2 billion to $3.2 billion over the five-year life of the bill.

Finally, the legislation proposes changes affecting several larger airports, such as Chicago’s O’Hare Airport, which rely on slot assignments to manage air traffic to and from these airports. TEA 21 directs these airports to eliminate their slot systems by March 1, 2000.

The House Committee leaders are now preparing AIR 21 for full House floor action and the broader debate on pending budget plans to provide for the commitment of future funding resources to these aviation needs.

The accompanying charts show annual spending levels over the five fiscal years of AIR 21 for several key program categories.

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