[Senate Report 107-161]
[From the U.S. Government Publishing Office]
Calendar No. 414
107th Congress Report
SENATE
2d Session 107-161
======================================================================
NATIONAL AVIATION CAPACITY EXPANSION ACT OF 2002
_______
June 11, 2002.--Ordered to be printed
_______
Mr. Hollings, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 2039]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 2039), to expand aviation
capacity in the Chicago area, having considered the same,
reports favorably thereon with an amendment in the nature of a
substitute and recommends that the bill (as amended) do pass.
Purpose of the Bill
The purpose of the bill is to end an impass over airport
expansion efforts in the Chicago area. The bill legislates a
process to provide that O'Hare International Airport expansion
plans and the efforts to move forward with the planning of a
new airport south of the City of Chicago proceed. The bill
ensures that all environmental processes, safety and efficiency
reviews, and all other relevant Federal analyses are conducted.
The bill further leaves untouched the Federal Aviation
Administration's (FAA) ability to exercise its authority in
determining the future of the projects. Finally, the bill seeks
to ensure that once Federal funds are expended to begin the
O'Hare redesign project, the State will not exercise its
authority to stop the project. The plan has the support of the
Governor of Illinois and the Mayor of Chicago.
Background and Needs
The dispute over airport expansion in Illinois has been
stalled for many years as various governors and mayors could
not come to a consensus regarding the prospects for a new
airport in the Chicago area. Many proposals were put forward
over the past 30 years, but no progress was made. Under
Illinois law, no airport construction in the State can proceed
without the approval of the governor. Recent efforts by Chicago
Mayor Richard Daley to expand O'Hare International Airport
(O'Hare) and efforts by Illinois Governor George Ryan to move
forward with plans for a new airport south of Chicago were
continually at an impasse.
The bill seeks to end that stalemate by ensuring that the
O'Hare reconfiguration plans and the plans to build a new south
suburban airport are fully reviewed by the FAA. In addition,
the bill provides that once Federal funds are provided, the
State will not exercise its rights to block the proposed O'Hare
expansion plan. It also requires that all environmental
processes be complied with, but does not guarantee or provide
any funding to either Chicago-area project or to a project for
the airport in Gary, Indiana.
With airport expansion in the Chicago region seemingly
deadlocked, Senators Harkin and Grassley, as well as Senator
Durbin, began to push for a Federal solution. Flight delays and
the lack of capacity at O'Hare were beginning to limit access
to Chicago for many small towns, and were affecting interstate
commerce in many parts of the country. This led the Commerce
Committee to hold a field hearing in Chicago on June 15, 2001,
to urge local factions to develop a solution that would expand
airport capacity in the Chicago region. At the time, nationwide
delays, including at O'Hare, were inhibiting interstate air
transportation. Witnesses at the June hearing included
representatives from the City of Chicago, the State of
Illinois, the Suburban O'Hare Commission, Chicago business
leaders, and the Chair of the Illinois House of Representatives
Aviation Subcommittee.
On December 5, 2001, Mayor Daley and Governor Ryan reached a
compromise to reconfigure O'Hare while proceeding with planning
for a new airport (termed ``South Suburban'' or ``Peotone''),
south of Chicago. The agreement to modernize and expand O'Hare
International Airport and to allow construction of a third
airport provides for:
(1) Expanding and reconfiguring O'Hare to eight
runways, with six parallel runways (see Appendix A);
(2) Planning a south suburban airport near Peotone;
(3) Improving ground infrastructure to address
traffic congestion, including western access to O'Hare;
and
(4) Continuing the operation of Chicago's Meigs Field
(a general aviation airport in Chicago).
The legislation will recognize the agreement between the City
and the State, facilitate interstate commerce, and provide some
certainty to the people of Illinois, the traveling public, the
passenger and cargo airlines using O'Hare, and general aviation
pilots that use Meigs Field. Testimony by Mayor Daley at the
Commerce Committee's second hearing on this matter held March
21, 2002, noted that the City did not want to commit funds to
the project only to have a subsequent governor overturn the
agreement. The Committee does not want to see Federal dollars
similarly misused. By supporting Federal legislation, Governor
Ryan, Mayor Daley and the Committee are seeking to avert
wasting local and Federal dollars.
O'Hare expansion will provide a significant boost for
business interests across the country, and the agreement has
earned the strong endorsement of many national organizations
such as the AFL-CIO and the U.S. Chamber of Commerce. The
aviation industry is also in agreement. Air traffic
controllers, the airlines represented by the Air Transport
Association, airports represented by Airports Council
International-North America and the American Association of
Airport Executives, the Aircraft Owners and Pilots Association,
and business leaders throughout the State of Illinois, all have
expressed their support for legislation to expedite modernizing
O'Hare. Congressmen Hyde and Jackson, both from Illinois,
testified against the plan and the legislation.
O'Hare is one the world's largest airports. As noted
elsewhere, it also, prior to September 11, was one of the most
delayed airports. These delays, costing consumers millions of
dollars in terms of time, also limited the ability to add
additional flights sought by small communities throughout the
country. With the advent of regional jets, access to O'Hare has
become possible for many more communities. Without a
reconfiguration of the facility, in the long term, such access
would be effectively cut off. O'Hare is one of the few major
hubs in the U.S. with two air carriers each operating in excess
of 35 percent of the flights. These hubs provide gateways to
hundreds of other communities and international cities.
In providing a degree of certainty that the agreement reached
by the Governor and Mayor will proceed, albeit with all
applicable legal, environmental and safety reviews, the
Committee is seeking to ensure that once Federal dollars are
committed, a future decision will not result in a waste of
those resources. Thus, to facilitate interstate commerce, and
to avoid wasteful spending, the bill effectively enables the
agreement to be thoroughly reviewed, and if approved, move
forward in the normal course of FAA practices.
O'Hare International Airport--Its Role in the National Aviation System
During World War II, Douglas Aircraft manufactured C-54
transport planes for the United States Air Corps on the site
that is now O'Hare. The City purchased the Douglas facility in
1945, and built the Orchard Place Airport on the site the
following year. In 1949, the airport was renamed for Edward
``Butch'' O'Hare, a Navy fighter ace and Congressional Medal of
Honor recipient. By 1959, the City began a massive expansion of
O'Hare, and the airport was redesigned to accommodate 20
million passengers annually. However, rapid and dramatic
changes in aviation have again stressed capacity, rendering the
once-modern enhancements obsolete.
O'Hare International Airport is a major transportation hub,
and is a crucial by-way for much of the nation's business and
travel demands. Despite the shut down of the air traffic
control system in response to the September 11 attacks, and
subsequent flight reductions by the air carriers, O'Hare
handled more flights in 2001 than at any other time in its
history and is currently the world's busiest airport. Last
year, more than 67 million passengers passed through O'Hare on
911,917 flights. O'Hare averages more than 2,500 commercial
flights each day to 174 non-stop markets, provided by 45
passenger airlines, as well as cargo flights provided by 19
cargo carriers. With non-stop flights to 47 of the 50 states
O'Hare serves more destinations than any other airport in the
nation, and more than half of those passengers depend on O'Hare
to connect between flights.
With so many travelers depending on O'Hare, a steady flow of
air traffic at the facility is important to locations across
the country. In a report issued last year, however, the FAA
determined that scheduled traffic at O'Hare met or exceeded the
airport's good weather capacity for 3\1/2\ hours per day and
its bad weather capacity for 8 hours per day. This stress on
capacity at O'Hare is a major factor leading to flight delays
at the airport.
Delays at O'Hare can have a crippling effect on the entire
U.S. aviation system, and the number of users in the system is
rapidly growing while O'Hare's current configuration has
remained unchanged. The FAA's recently announced aerospace
forecast projections indicate commercial air carrier
enplanements are expected to increase from 649.9 million in
2001 to 954.1 million in 2013, which represents a system-wide
growth rate of 4 percent annually over the next 12 years.
Demand at O'Hare alone is anticipated to grow by 18 percent
over the coming decade according to the recent airport capacity
report, and the imbalance between capacity and demand growth is
expected to significantly increase delays at O'Hare over this
time period.
These delays cost travelers time and money. Moreover, the
carriers also suffer financial losses due to the costs
attributed to such delays, including fuel burn and other
expenses. Delays cost $166.5 million per year to the airlines
at O'Hare alone, and billions to airlines and travelers across
the nation (based on an average operation cost of $25.17 per
minute of delay for the nationwide fleet). Last year, prior to
September 11, the FAA identified O'Hare as one of the major
choke points in the national aviation system in its Aviation
Capacity Benchmark Report when it identified O'Hare as the
third most delayed airport in the country (after LaGuardia and
Newark) in 2000.
Unlike New York's LaGuardia Airport and some of the nation's
other delay-plagued airports, O'Hare has an opportunity to
expand primarily using the existing airport area and provide
needed aviation apacity for many years. According to testimony
by proponents, O'Hare's antiquated runway layout is the primary
cause of these delays. Although it is at the center of the
national aviation system, O'Hare struggles with an old-
fashioned, inefficient airfield design.
Modern runway design employs parallel approaches in
instrument flight rule conditions. Proponents of the redesign
plan assert that by modernizing O'Hare's airfield by
constructing one new runway and relocating three existing
runways, delays and congestion are projected to be reduced
dramatically. An up-to-date configuration, according to
testimony by the City of Chicago, will reduce bad weather
delays by 95 percent, and overall delays by 79 percent. With a
broader layout, O'Hare could be far more efficient, and the
whole national air transportation system would benefit. Under
the legislation, the FAA will review the benefits of the
redesign pursuant to existing guidelines.
While the need to increase aviation capacity in the Chicago
region is clear, taking the necessary action to address this
need has been difficult. In the early 1970s, the City took
action to plan for regional aviation development, and began to
prepare a Master Plan Study for O'Hare which represented the
first attempt to formulate a systematic plan of growth in the
area. While the Master Plan Study was in the preparation stage,
opponents of continued growth at O'Hare filed suit against the
FAA in 1974. Since this time, no expansion has occurred and no
consensus has been achieved on how to increase capacity for the
Chicago region until the agreement between Governor Ryan and
Mayor Daley was reached.
Summary of Major Provisions
The bill does the following:
Lays out in precise detail the Chicago-area aviation
agreement reached by Governor Ryan and Mayor Daley on
December 5, 2001, providing for the reconstruction and
expansion of O'Hare and allowing for the construction
of a third Chicago-area airport at Peotone, Illinois.
Nothing in the bill guarantees any funding for the
O'Hare or Peotone project, or mandates that a specific
set of runway configurations be approved, as the FAA
retains all its existing discretion to analyze, review,
and, if all relevant tests are met, approve the O'Hare
project. For example, the bill requires that any new
runway redesign increase capacity in both instrument
and visual flight conditions and that the percentage of
runway incursions not increase.
Seeks to ensure that the deal to expand O'Hare made
by the Governor and the Mayor is not broken, but is
thoroughly reviewed and is consistent with the safety
and efficiency of the air traffic control system. Under
Illinois law, the City of Chicago cannot build new
runways or reconfigure existing runways without the
approval of the governor. The bill seeks to prohibit a
future governor from disapproving the decision to move
forward once Federal funds are expended.
Directs the FAA, while retaining FAA's existing
authority, to implement the agreement reached between
the Governor and the Mayor by facilitating the runway
redesign plan submitted by O'Hare. This action would be
contingent upon the FAA's determination that the plan
meets all existing requirements for the project. The
FAA has discretion to modify the plan, if necessary,
for efficiency, safety, or other concerns. The bill
also gives priority consideration for an application
for a letter of intent (LOI) for a new south suburban
airport and also for an LOI for Gary, Indiana.
Requires any redesign plan to conform with the Clean
Air Act and to conform to all other environmental
mandates to the maximum extent possible,while requiring
that the State use its customary practices to analyze
any Clean Air Act requirements.
Requires that before a plan is approved for O'Hare,
soundproofing of residential property and schools is
included in the plan.
Requires the continued operation of Meigs Field under
the control of the City of Chicago.
Provides no priority for federal funding of any
O'Hare projects, including the runway redesign plan.
Recognizes the importance of utilizing Gary/Chicago
Airport, Rockford, IL Airport, and other existing
infrastructure to promote capacity and reduce
congestion in the region.
Does not make a determination whether if the proposal
is safe, as that is a matter for the FAA to review. The
legislation specifically notes that the FAA's safety
authority and ability to disapprove the plan is not
affected. For example, under the plan, the distance
between runway centerlines, whether configured as
independent or dependent parallel runways, and how each
is used, will be carefully reviewed by the FAA. If the
layout of the runways is deemed unsafe, inefficient, or
needs adjustments, that decision under the bill, and
under existing law, is left to the FAA.
Ensures, with respect to access to O'Hare, that all
carriers benefit from the expansion plans, not just the
two major carriers, United and American. Access is
facilitated by requiring, as part of any grant
provided, that the FAA receive appropriate assurances
that ``have-not'' or new entrant carriers be provided
reasonable access to gates and facilities. Also, the
bill does not adversely affect the property rights of
those incumbent carriers.
Legislative History
On March 20, 2002, Senator Durbin introduced S. 2039, the
National Aviation Capacity Act of 2002.
On March 21, 2002, the Committee held a hearing to consider
the agreement reached between Governor Ryan and Mayor Daley to
expand airport capacity in the Chicago area. The hearing
focused on the agreement and also on the legislation that was
introduced by Senator Durbin to help implement the agreement.
The Mayor and Governor both testified in support of the bill.
On April 18, 2002, the Commerce Committee ordered S. 2039 to
be reported with an amendment in the nature of a substitute.
The Committee adopted: a manager's amendment; an amendment by
Senator Dorgan to protect existing property holders at O'Hare;
compromise language offered by Senator McCain on behalf of
Senator Fitzgerald that notes that the FAA Administrator is not
required to approve the O'Hare runway redesign plan; an
amendment offered by Senator Fitzgerald on runway incursions;
and an amendment offered by Senator Fitzgerald clarifying noise
mitigation requirements. The Committee rejected amendments
offered by Senator Fitzgerald that sought to limit the area of
O'Hare expansion and to have the Federal government regulate
contracting at O'Hare, which would have required all contract
services to be reviewed.
The agreement reached by Governor Ryan and Mayor Daley was
spurred by the June 15, 2001, Commerce Committee field hearing
in Chicago which looked at proposals to improve air service to
the region. At the field hearing, the State and Mayor's
representatives were told to try to work out a plan by
September 1, 2001. While this deadline was not met, a plan was
offered on December 5, 2001, when the Mayor and Governor agreed
to reconfigure O'Hare and proceed with planning for a new
airport (Peotone), south of Chicago.
The agreement between Mayor Daley and Governor Ryan is a
compromise that has taken years to reach. In an effort to make
certain that the State of Illinois moves forward on expanding
air service in the Chicago region, the agreement by the State
and City was encompassed in legislation that was introduced in
both the House and Senate. In the Senate, Senator Durbin first
introduced S. 1786, and later introduced S. 2039, to ensure
that O'Hare expansion plans continue. In the House, H.R. 3479
was introduced by Rep. Lipinski, and has more than 100
cosponsors.
On December 7, 2001, Senator Durbin attempted to add S. 1786
to the Department of Defense Appropriations Act of 2002.
Senator Fitzgerald objected and debated the issue for several
hours. He argued that only Peotone should be built and that
O'Hare expansion will not add any new capacity, will create
unsafe conditions, and will contribute to noise and other
environmental degradations. Senator Durbin subsequently
withdrew the amendment.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 7, 2002.
Hon. Ernest F. Hollings,
Chairman, Committee on Commerce, Science, and Transportation, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2039, the National
Aviation Capacity Expansion Act of 2002.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark Hadley
(for federal costs) and Susan Sieg Tompkins (for the state and
local impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
S. 2039--National Aviation Capacity Expansion Act of 2002
S. 2039 would direct the Administrator of the Federal
Aviation Administration (FAA) to assist in redesigning and
reconstructing Chicago O'Hare International Airport in Cook and
Dupage Counties, Illinois, in accordance with a specified
runway design plan. FAA also would be directed to assist in
developing a south suburban airport in the Chicago metropolitan
region. The bill would require an implementation plan to be
prepared by the state of Illinois under the Clean Air Act for
regulating emissions associated with activities at commercial
service airports.
CBO estimates that S. 2039 would have no significant impact
on federal spending. The bill could affect which projects the
FAA chooses to support, but based on information from the
agency, CBO estimates that S. 2039 would have no net effect on
total spending for such projects. Because S. 2039 would not
affect direct spending or receipts, pay-as-you-go-procedures
would not apply.
The bill would preempt the state of Illinois' authority to
regulate certain activities of the owners of O'Hare airport.
Specifically, the bill would preempt the state's authority to
control or regulate the owner of O'Hare airport as it applies
for federal grant funds to pay for the airport expansion. In
addition, the bill would limit the state's authority to impose
regulations on aviation safety with respect to the development
of a runway redesign plan for O'Hare. These preemptions would
be intergovernmental mandates as defined in the Unfunded
Mandates Reform Act (UMRA).
In implementing the runway redesign plan at O'Hare, the
city of Chicago would have to take steps to mitigate noise in
residential units and schools around the airport. The city also
would be prohibited from using the Clean Air Act to interfere
with runway construction at O'Hare or development of another
airport south of Chicago. These requirements also would be
intergovernmental mandates as defined in UMRA.
Based on information from FAA and the city of Chicago, CBO
estimates that the preemptions of state authority and the
requirements placed on the city would not impose significant
costs. Thus, the costs of the bill's mandates would not exceed
the threshold established by UMRA ($58 million in 2002,
adjusted annually for inflation). The bill contains no new
private-sector mandates as defined in UMRA.
The CBO staff contacts for this estimate are Mark Hadley
(for federal costs) and Susan Sieg Tompkins (for the state and
local impact). This estimate was approved by Peter H. Fontaine,
Deputy Assistant Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
Because S. 2039 does not create any new programs, the
legislation will have no additional regulatory impact, and will
result in no additional reporting requirements. The legislation
will have no further effect on the number or types of
individuals and businesses regulated, the economic impact of
such regulation, the personal privacy of affected individuals,
or the paperwork required from such individuals and businesses.
A number of provisions in the bill require the FAA and other
agencies to participate in reviewing the redesign plan, which
includes a western access road system, to ensure that an
existing airport remain open, and to consider expeditiously
applications for letters of intent for airport infrastructure
projects. All of these types of requirements are actions that
the Federal government routinely participates in and the burden
on the government is not increased by the legislation. In
addition, while the bill effectively directs the City of
Chicago and State of Illinois to submit their plans and
proposals, each has agreed voluntarily to do so, and there are
no additional requirements imposed upon them.
number of persons covered
The bill affects entities already subject to FAA rules and
regulations, and the number of persons covered is unchanged by
the legislation. The process to review the application by the
City of Chicago to expand O'Hare will be subject to all
regulatory and environmental reviews in the normal course of
business, and persons affected by any such expansion, should it
ultimately be approved, under existing regulatory procedures
will have ample opportunity to raise issues and concerns with
the FAA. The same is true if, and when, plans to expand the
airport at Gary, Indiana, are put forward and if plans to build
the new south suburban airport proceed.
economic impact
As noted above, O'Hare International Airport is one of the
nation's largest airports, channeling more than 67 million
passengers per year to destinations around the globe. O'Hare
generated employment creates jobs for more than 365,000
individuals, and according to reports, the airport is the
impetus for more than $30 billion in economic activity
annually. The proposed plan to expand capacity from some
900,000 operations to approximately 1.6 million operations a
year is expected to generate 195,000 more jobs and is projected
to reduce delays at the airport by 79 percent overall, cutting
costs in terms of travel time, fuel burn and other factors by a
significant amount.
The priority designation for letters of intent, an instrument
delineating the FAA's long term funding commitment to an
airport construction project, if ultimately granted, will
provide benefits to Gary and the new South Suburban Airport, as
each of those projects move forward. At this point, those
benefits--delay reductions, jobs, and other factors--have not
been clearly identified, but it is anticipated that each will
have positive economic impacts for their respective areas and
the region.
privacy
Nothing in the bill affects the privacy rights of any
individuals.
Paperwork
Nothing in the bill increases the paperwork burden on the
private sector or the Federal government as the existing means
for processing grant applications for airport expansion
projects, and conducting the environmental review process are
unchanged. In one respect, paperwork requirements may be
reduced as the State of Illinois, having already agreed to the
O'Hare project and the Peotone concept, will not have to go
through the review in the out years of the need for the project
and the analysis of the funding requests from the airport, both
of which exist under current law. The bill requires that the
FAA submit a report to Congress if necessary criteria to begin
construction on the O'Hare redesign plan have not been met
December 31, 2004.
Section-by-Section Analysis
Section 1. Short title
Section 1 designates the short title of the bill as the
``National Aviation Capacity Expansion Act of 2002.''
Section 2. Findings
Section 2 presents a dozen findings of Congress to explain
the purpose of the bill.
It also explains the background for the legislation, which
includes noting how important airport expansion nationwide is
to addressing longer term capacity needs. The Committee last
year favorably reported legislation S. 633, the Aviation Delay
Prevention Act, designed to streamline the entire airport
construction review process for all airports. This bill focuses
on the particular details of the Chicago metropolitan area and
the need to expand capacity.
Section 3. Airport construction and redesign
Section 3 reiterates the importance of the Chicago region to
the national air transportation system, and directs the FAA
Administrator to pursue both an expansion of O'Hare
International Airport and a review of plans for a south
suburban airport. Any action taken by the FAA regarding these
efforts are required to be consistent with existing
environmental and safety requirements. The approved runway
redesign plan must be able to demonstrate improved capacity
regardless of weather conditions, and the existing property
rights of airport users must not be affected by these
provisions. Approval of the runway redesign plan is conditioned
on meeting the requirements of the Clean Air Act, the use of
best management practices, and maintaining existing levels of
airport safety.
Section 3 also prohibits the State of Illinois from
interfering with the O'Hare runway redesign plan. Furthermore,
the State is required to develop an implementation plan
according to the normal process to account for emissions at the
State's commercial service airports without intentionally
interfering with airport capacity efforts.
The legislation before the Committee presented a unique set
of circumstances because of an unusual set of provisions under
Illinois State law to which airports in other States, are not
subject. Under Illinois law, the Governor, through his
Transportation Department, must issue a certificate approving
authorization for runway construction (Section 47), and no
local government can apply for Federal airport grants without
State approval (Section 38.01--Also referred to as a
``Channeling Act''). Thus, without Federal legislation, it is
possible that a future governor may put a halt to O'Hare's
expansion after it has already begun, which would waste federal
dollars and adversely affect interstate commerce.
As noted above, Illinois is one of only a few states that
provides airport approval power to State Executive authority.
Even if O'Hare does not receive any State money, the Governor
maintains the power to deny new or relocated runways at O'Hare.
Of those states that have executive approval, according to
testimony by Mayor Daley, only O'Hare has been prevented from
implementing a runway plan because of State opposition.
O'Hare serves as a gateway to hundreds of domestic and
international markets for small- and medium-sized communities.
Increased capacity at O'Hare would allow communities throughout
the U.S. additional access to many cities, both here and
abroad. Given local agreement, and unique Illinois laws, the
bill seeks to ensure that, consistent with all applicable laws,
the review process moves forward, funding for planning and
analysis is made available through the normal FAA grant
process, without any priority for O'Hare, and that once begun
and once approved, the Federal, State, and local resources are
not wasted, merely due to a future change in political
position.
Section 3 also requires that any approved airport plan is
phased to ensure that the construction of an east-west runway
which conforms to certain stated conditions does not begin
prior to January 1, 2011. Any plan must include public roadway
access through the existing western boundary of O'Hare, and is
required to provide noise mitigation for local communities. The
FAA Administrator is prohibited from moving forward with O'Hare
redesign until a satisfactory noise mitigation plan is offered
by the City of Chicago which provides a continual lessening of
noise impact for surrounding communities in each successive
calendar year. With respect to environmental concerns, the bill
specifically requires that as part of any plan approval for the
runway redesign, the City must include acoustical treatment of
residences and schools within the 65 DNL noise contour. The
Committee understands that the agreement between the Mayor and
Governor includes about $450 million for soundproofing. The
Committee notes that as the U.S. commercial fleet has phased
out noisier, older aircraft, the number of people nationwide
inside of the 65 DNL area has been substantially reduced, and
that for the Chicago area, the reduction represents more than
20,000 homes since 1997. The Federal government will have no
financial responsibility for the O'Hare project if these
conditions are not met.
The debate over the costs of the O'Hare expansion project is
not settled by the legislation and the plan includes a number
of items that are not eligible for FAA airport grant monies or
Passenger Facility Charges (PFC) funding. According to the
Illinois Department of Transportation, the cost of the proposed
O'Hare expansion is estimated at between $5.65 billion and
$6.75 billion for the airfield changes, terminal development,
road improvements, land acquisition and noise mitigation.
However, as with all airport projects, the figures are only
estimates. As the project is vetted, firmer estimates will be
developed. Under existing FAA procedures, the costs of the
project will be reviewed to confirm that, for example,
construction estimates are reasonable. In addition, if
substantial Airport Improvement Program (AIP) dollars are
provided, the FAA will conduct a benefit cost analysis of the
project. With respect to sources of funding, airport projects
are funded from a multitude of sources--one source is the FAA's
AIP program, under which the City of Chicago receives
approximately $6.5 million in entitlement funds for O'Hare each
year. Another source is passenger facility charges--a $4.50 per
segment fee imposed on passengers to expand capacity. Other
sources include bonds (e.g., general aviation revenue bonds)
that may be backed by airport rates and charges imposed on
incumbent carriers or that are backed by other sources of
revenue. Generally, such bond financing is provided through the
private sector based upon the viability of the project and the
ability to repay. Thus, the issue of costs is not one that is
addressed in the bill and the matter will be considered by the
FAA, the City, the State, the affected carriers, and the
financial community. The Committee, knowing that this issue was
not a matter for the Committee to determine, specifically
included language that nothing in the bill provided any monies
or a priority for such Federal funds. As a general matter, the
FAA where it does provide funds for a major project, only pays
for a small portion of a project's total costs.
Section 3 requires the FAA Administrator to give priority
consideration to applications for letters of intent (LOI)
submitted by the State of Illinois, the State of Indiana, or
political subdivisions thereof for a south suburban airport or
an extension of the main runway at Gary/Chicago Airport. The
only priorities accorded to airports are those for Gary,
Indiana, and the new south suburban airport, both of which will
be provided a priority consideration for their LOI, the FAA's
long-term funding commitment letters. The Committee
understands, in adding Gary to receive such consideration, that
the airport has plans to expand its airport and that the plans
include a de minimus amount of funds for environmental cleanup.
Nothing in the Act mandates any specific set of criteria for
approval under the LOI requests, but only that each will be
considered expeditiously. A report to Congress is mandated if
necessary criteria to begin construction on O'Hare runway
redesign plan have not been met by December 31, 2004.
Section 3 requires Merrill C. Meigs Field to remain open,
owned and operated by the City of Chicago until January 1,
2026. The provision enables the City to use revenues from the
two largest carriers at O'Hare, American and United, to pay for
the operating and maintenance costs of Meigs. The Committee
understands that these two carriers have agreed to the
arrangement and that other carriers are not party to the
agreement. If circumstances at O'Hare change, the Committee
anticipates that agreements would need to be reached with other
carriers. Additionally, Section 3 sets the definition for the
terms ``runway redesign plan,'' ``south suburban airport,''
``Administrator,'' ``State,'' and ``implementation plan.''
Section 4. Application with existing law
Section 4 requires that no priority is given to Federal
funding of O'Hare noise mitigation projects or the O'Hare
runway redesign plan.
Section 5. Competitive access requirements
Section 5 requires that, in providing funds to expand O'Hare,
the FAA is required to receive adequate assurances (generally
referred to as grant assurances) that gates and facilities are
available, or will be made available on fair and reasonable
terms to all carriers serving or seeking to serve O'Hare. As
expansion of runways and redesign occurs, and as new terminals
are built, the provision ensures that access by carriers other
than the two dominant carriers, United and American, is
provided.
Section 5 seeks grant assurances that existing exclusive use
gate arrangements are phased out as contracts expire and as,
and if, new facilities are provided. The City is urged to do so
as soon as practicable so that other carriers can obtain access
to the airport. The phase out of exclusive use contracts for
gates and associated facilities extends to such assets that are
either relinquished by existing tenants or those assets added
to the airport. Finally, the section requires the airport to
conduct a comprehensive study of the existing facilities and
types of contracts in existence.
Under Section 5, in providing relief under the bill, the
Committee is cognizant that access to O'Hare must be provided
to the ``have not'' carriers as mentioned earlier. O'Hare today
is dominated by two major U.S. carriers-Chicago-based United
Airlines and Dallas-Ft. Worth-based American Airlines. Other
carriers are concerned that as construction ensues, and new
terminals are constructed, that they be provided reasonable
access to gates and facilities. Senator Dorgan offered an
amendment that was accepted that protects existing property
rights. Senator Dorgan was concerned that the ``have not''
carriers might have their terminal space condemned by the City.
Through Section 5, the Committee recognizes that while
expansion is critical for all carriers and travelers, access
for ``have not'' carriers must be provided on fair and
reasonable terms. The Committee maintains a strong interest in
promoting a competitive environment among air carriers and does
not favor arrangements that can have the counter-effect. In
building its new facilities and new terminals, the Committee
expects that the City will use funds to build new gates that
are available for ``have not'' and new entrant carriers. The
assurances the FAA can seek as part of the funding could
include the construction of additional gates. The Committee
believes that the Federal government's oversight should be
focused and sufficient to help foster the pertinent policy
objective. Any alterations of existing arrangements between air
carriers and an airport operator, pursuant to this section,
should be handled in a balanced manner that recognizes the
rights that accrue to each party in such previously-negotiated
business arrangements. The Committee anticipates that, if such
arrangements are renegotiated, they be conducted in good faith
between the parties. However, as contracts expire and new
leases are entered into, the Committee expects that lease
arrangements, particularly for the dominant carriers, will use
non-exclusive types of arrangements. The Committee in reviewing
this issue understands and expects that existing preferential
use gates and facilities contracts for United and American will
all become either preferential or common-use, and that as other
contracts expire or are renegotiated, the City, to the extent
practicable, will utilize non-exclusive arrangements for the
``have not'' carriers as well. However, flexibility is provided
in the bill so that the non-dominant carriers are not
disadvantaged by such actions, and it is not intended by any of
the provisions of Section 5 that any existing contract with
``have not'' carriers be impaired.
Rollcall Votes in Committee
In accordance with paragraph 7(c) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following description of the record votes during its
consideration of S. 2039:
Senator Fitzgerald offered an amendment, to the amendment (in
the nature of a substitute) offered by Senator Hollings, to
encourage the FAA to consider alternative proposals for the
modernization of O'Hare. By rollcall vote of 4 yeas and 19 nays
as follows, the amendment was defeated:
YEAS--4 NAYS--19
Mr. Lott Mr. Hollings
Mr. Fitzgerald Mr. Inouye\1\
Mr. Ensign\1\ Mr. Rockefeller\1\
Mr. Allen Mr. Kerry\1\
Mr. Breaux
Mr. Dorgan
Mr. Wyden
Mr. Cleland\1\
Mrs. Boxer\1\
Mr. Edwards\1\
Mrs. Carnahan\1\
Mr. Nelson
Mr. McCain
Mr. Stevens\1\
Mr. Burns
Mrs. Hutchison
Ms. Snowe
Mr. Brownback
Mr. Smith
\1\By proxy
Senator Fitzgerald offered an amendment, to the amendment (in
the nature of a substitute) offered by Senator Hollings, to
require competition in contracting for services and sale of
goods at O'Hare. By rollcall vote of 8 yeas and 15 nays as
follows, the amendment was defeated:
YEAS--8 NAYS--15
Mr. McCain Mr. Hollings
Mr. Lott Mr. Inouye\1\
Ms. Snowe Mr. Rockefeller\1\
Mr. Brownback Mr. Kerry\1\
Mr. Smith Mr. Breaux
Mr. Fitzgerald Mr. Dorgan
Mr. Ensign\1\ Mr. Wyden
Mr. Allen\1\ Mr. Cleland\1\
Mrs. Boxer\1\
Mr. Edwards\1\
Mrs. Carnahan\1\
Mr. Nelson
Mr. Stevens\1\
Mr. Burns
Mrs. Hutchison
\1\By proxy
By rollcall vote of 19 yeas and 4 nays as follows, the bill
was ordered reported with an amendment in the nature of a
substitute:
YEAS--19 NAYS--4
Mr. Hollings Mr. Lott
Mr. Inouye\1\ Mr. Fitzgerald
Mr. Rockefeller\1\ Mr. Ensign\1\
Mr. Kerry\1\ Mr. Allen\1\
Mr. Breaux
Mr. Dorgan
Mr. Wyden
Mr. Cleland\1\
Mrs. Boxer\1\
Mr. Edwards\1\
Mrs. Carnahan\1\
Mr. Nelson
Mr. McCain
Mr. Stevens\1\
Mr. Burns
Mrs. Hutchison
Ms. Snowe
Mr. Brownback
Mr. Smith
\1\By proxy
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, the Committee states that the bill as
reported would make no change to existing law.