By Ron Thaniel
April 14, 2003

Two weeks after U.S. Secretary of Transportation Norman Y. Mineta sent to Congress the Administration's AIR-21 reauthorization entitled the Centennial of Flight Aviation Authorization Act (Flight-100), the Senate Commerce, Science and Transportation introduced a FAA Reauthorization bill aimed at increasing funding for the Airport Improvement Program (AIP). It would also reimburse airports for security costs such as installing Explosive Detection Machines.

The current law, AIR-21 expires on September 30 and must be reauthorized to continue airport improvements. Flight-100 would authorize funding for fiscal year 2004 through 2007.

Senators John McCain (AZ) and Senator Ernest Hollings (SC), the Chairman and Ranking Member of the Senate Commerce Committee introduced the Senate bill. The other two cosponsors are Senators Trent Lott (MS) and John D. Rockerfeller IV (WV), the Chairman and Ranking Member of the Subcommittee on Aviation.

The Senate Commerce, Science and Transportation Committee is proposing $3.4 billion for AIP in FY 2004, $3.5 billion in FY 2005, and $3.6 billion in FY 2006. By contrast, the Administration flat lines AIP at $3.4 billion over the four-year life of Flight 100. Furthermore, the Administration's proposal includes changes in the AIP formula and set-asides that "would direct more assistance to airports with greatest need". Of concern as well is that the Administration proposes halving the AIP funds of large and medium airports to fund smaller airports and a larger FAA discretionary fund.

The Airport Improvement Program (AIP) is a federal grant-in-aid program that represents a major source of funding for airport development and planning. Funds obligated for the AIP are drawn from the Airport and Airway Trust fund which is supported by user fees, fuel taxes and other similar revenue sources.

The FAA's most recent National Plan of Integrated Airport Systems indicates that airports need $46 billion just for AIP-eligible projects between 2001 and 2005. In addition, almost $1 billion of AIP money has been diverted from airport capacity projects to fund Transportation Security Administration (TSA) security related projects. The U.S. Conference of Mayors Aviation Security Task Force has urged the TSA to reimburse the AIP account as well as increase the AIP account to meet urgent capacity infrastructure needs.

The Senate Commerce, Science and Transportation Committee and Administration agreed on the funding levels of FAA Operations at $7.6 billion in FY 2004, $7.7 billion in FY 2005, and $7.9 billion in FY 2006.

However, the Committee did not endorse the Administration's proposal to use the Airport and Airway Trust Fund to pay for 79 percent of FAA operations. Under the Administration's plan, the uncommitted balance of the Trust Fund would drop to $1.1 billion at the end of FY 2007.

In addition, the Senate Commerce, Science and Transportation Committee bill creates an aviation security capital fund within DOT to provide financial assistance to airport sponsors to defray capital investment in transportation security at airport facilities. The bill calls for $500 million every year between 2004 and 2007 to be allocated to airports to pay for capital investment such as installing Explosive Detection Systems. The funds would be derived from revenue generated by the $2.50 passenger security fee.

The Administration's bill would also build on the executive order on streamlining to facilitate airport development. The Senate Commerce, Science and Transportation Committee as well include the project streamlining provision in their bill.

The committees in both the Senate and House expect swift action on the reauthorization of FAA so that this bill is not bumped for the larger and more controversial transportation and Amtrak reauthorizations also set to expire this fall.