[Senate Report 108-41]
[From the U.S. Government Publishing Office]
108th Congress Report
SENATE
1st Session 108-41
_______________________________________________________________________
Calendar No. 83
AVIATION INVESTMENT AND REVITALIZATION VISION ACT
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 824
May 2, 2003.--Ordered to be printed
Filed under authority of the order of the Senate of May 1, 2003
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred eighth congress
first session
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois RON WYDEN, Oregon
JOHN ENSIGN, Nevada BARBARA BOXER, California
GEORGE ALLEN, Virginia BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington
FRANK LAUTENBERG, New Jersey
Jeanne Bumpus, Staff Director and General Counsel
Ann Begeman, Deputy Staff Director
Robert W. Chamberlin, Chief Counsel
Kevin D. Kayes, Democratic Staff Director
Gregg Elias, Democratic General Counsel
Calendar No. 83
108th Congress Report
SENATE
1st Session 108-41
======================================================================
AVIATION INVESTMENT AND REVITALIZATION VISION ACT
_______
May 2, 2003.--Ordered to be printed
Filed under authority of the order of the Senate of May 1, 2003
_______
Mr. McCain, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
[To accompany S. 824]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 824) ``A bill to reauthorize
the Federal Aviation Administration, and for other purposes'',
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 S. 824 is to reauthorize the Federal Aviation
Administration (FAA) for three years; strengthen FAA
management; provide funding for the Airport Improvement Program
(AIP); authorize funding for the FAA's Operations, Facilities
and Equipment, and Research, Engineering, and Development
accounts; provide funding for security capital costs at
airports and streamline the process for approving and
constructing airport capacity projects.
Background and Needs
I. OVERVIEW OF FEDERAL INVOLVEMENT IN CIVIL AVIATION
A little more than two decades after Wilbur and Orville
Wright took flight on December 17, 1903 over Kill Devil Hills,
North Carolina, the United States Congress passed the Air
Commerce Act of 1926. The Act, which established an Aeronautics
Branch within the Department of Commerce, was the beginning of
the Federal government's involvement in the regulation and
development of civil aviation. This landmark legislation was
passed at the urging of the aviation community, which was
concerned that aviation could not reach its full commercial
potential without Federal action to improve and maintain safety
standards. In 1938, Congress passed the Civil Aeronautics Act
to create an independent agency, the Civil Aeronautics
Authority, with expanded authority to issue air carrier route
certificates and regulate airfares. The Civil Aeronautics
Authority was comprised of the Department of Commerce's Bureau
of Air Commerce and the Bureau of Air Mail from the Interstate
Commerce Commission, combining safety and economic regulatory
authority in one federal agency.
The introduction of jet airliners, and a series of midair
collisions, spurred passage of the Federal Aviation Act of 1958
(Aviation Act). This legislation established two independent
bodies, the Federal Aviation Agency, which had broader
authority to enforce safety regulations, and the Civil
Aeronautics Board (CAB), which oversaw the economic regulation
of air carriers. The Aviation Act entrusted safety rulemaking
to the Federal Aviation Agency and gave it sole responsibility
for developing and maintaining a common civil-military system
of air navigation and air traffic control. In 1967, the Federal
Aviation Agency was incorporated into the newly created
Department of Transportation (DOT) and was renamed the Federal
Aviation Administration (FAA). In 1978, Congress passed the
Airline Deregulation Act which phased-out the CAB's authority
over fares and phased-out the CAB itself by 1985.
The Aviation and Transportation Security Act, enacted on
November 19, 2002, established the Transportation Security
Administration (TSA) to be responsible for the security of all
modes of transportation. On February 13, 2002, responsibility
for aviation security was transferred from FAA to TSA.
II. OVERVIEW OF THE FAA'S FUNCTIONS
Today, the FAA has almost 50,000 employees at its
headquarters in Washington, DC, in regional offices, and at
facilities around the country and world. The FAA fulfills its
mission through ``lines of business'' that work together to
create and maintain the nation's aviation system. The primary
lines of business are:
Air Traffic Services: Manages civil and military air
traffic by developing and recommending national
policies and establishing national programs,
regulations, standards, and procedures for management
of the National airspace; operates air navigation and
communications systems and facilities; maintains
separation and control of aircraft; and provides flight
assistance to aircraft.
Regulation and Certification: Oversees the safety of
aircraft and the credentials and competency of pilots
and mechanics, develops mandatory safety rules, and
sets the standards that have helped make air travel
among the safest modes of transportation in history.
Airports: Provides oversight of planning and
development of a safe, secure, and efficient airport
system; manages the environmental review process for
airport projects; and develops standards for the design
and construction of facilities that enhance the safety
of aircraft operations and security of airline
passengers.
Research and Acquisition: Supports and conducts
research to meet increasing demands for higher levels
of system safety, security, capacity, and efficiency;
and plans, monitors, controls, schedules, and
implements the acquisition of materials, equipment, and
services for the national airspace system and for
interagency and international programs.
Commercial Space Transportation: Oversees the safety
of commercial space launches and regulates the
commercial space industry.
III. OVERVIEW OF AIRPORTS IN THE UNITED STATES
There are approximately 19,300 airports in the United States,
of which about 5,300 are open for public use, and the remainder
are for private or special use. The FAA included 3,364 airports
in its 2001 National Plan of Integrated Airport Systems
(NPIAS). The NPIAS is a statutorily required planning document
and must be published every two years. It estimates the costs
associated with establishing a system of airports adequate to
meet the needs of civil aviation. All airports with scheduled
commercial air service are automatically included in the NPIAS.
Furthermore, general aviation airports that meet certain
criteria are also incorporated in the plan. An airport must be
included in the NPIAS in order to be eligible for Federal
funding.
The FAA further categorizes the NPIAS airports by size. The
table below shows airports categorized by size and the amount
of traffic each category handles (an enplanement is defined as
a passenger leaving on a flight).
TYPES AND NUMBER OF AIRPORTS \1\
------------------------------------------------------------------------
Percentage
Number of Percentage of general
Airport type airports of all aviation
enplanements aircraft
------------------------------------------------------------------------
Large-hub primary............. 31 69.6 1.3
Medium-hub primary............ 37 19.3 2.9
Small-hub primary............. 74 7.7 4.7
Non-hub primary............... 280 3.2 11.3
Other commercial service...... 124 0.1 2.0
Relievers..................... 260 0.0 27.1
General aviation.............. 2,558 0.0 37.2
-----------------------------------------
Total NPIAS airports.... 3,364 100.0 86.4
Non-NPIAS airports............ 15,942 0.0 13.6
------------------------------------------------------------------------
\1\ Figures provided by FAA.
The FAA estimates that 98 percent of the United States
population lives within 20 miles of a NPIAS airport and 67
percent live within 20 miles of a NPIAS airport that is served
by commercial air service.
A. CAPITAL NEEDS OF AIRPORTS
For 2001 through 2005, the FAA has estimated annual planned
capital development costs of about $9 billion, while the
Airports Council International (ACI), an organization
representing large airports, has estimated annual costs of
about $15 billion for airports for 2002 through 2006. FAA's
estimate included only projects that are eligible for Federal
funding, whereas ACI's estimate includes projects that are both
eligible and ineligible for Federal funding. Generally, Federal
funding for improvements are related to aircraft operations,
typically for planning and construction of projects such as
runways, taxiways, aprons, noise abatement, and land purchase,
as well as security, safety, or emergency equipment. Commercial
revenue producing portions of terminals (such as shop
concessions or commercial maintenance hangars), automobile
parking garages, and off-airport road construction are examples
of improvements that generally are not eligible for Federal
funding.
Neither FAA's nor ACI's estimates cover the airport terminal
modifications needed to fully integrate the new explosives
detection systems (EDS) required to screen checked baggage.
According to Congressional testimony by TSA and the DOT
Inspector General, these modifications could cost $3 billion to
$5 billion over the next five years, but it has not been
determined how the modifications will be funded. The bill
creates a funding mechanism to ensure that these modifications
have adequate funding.
If airports continue to receive about $12 billion a year from
all sources for capital projects (this is the average amount
they received from 1999 through 2001), they would be able to
fund all of the projects included in the FAA's estimate. They
would fall short, however, of the ACI estimate by about $3
billion per year.
According to FAA's analysis, 61 percent of capital needs at
airports are for capacity enhancement, reconstruction, and
modifications to bring the facilities up to the agency's design
standards and 39 percent of the needs are related to safety,
security, and environmental projects.
B. FUNDING SOURCES
As noted above, from 1999 to 2001, the 3,364 NPIAS airports
received an average of $12 billion per year for capital
development. The largest source of funds was bonds, followed by
AIP grants and passenger facility charges (PFCs). The table
below shows the amount and distribution of funding for NPIAS
airports:
SOURCES OF AIRPORT FUNDING \1\
[Dollars in billions]
------------------------------------------------------------------------
1999-2001
Funding source average Percent
funding of total
------------------------------------------------------------------------
Airport bonds..................................... $6.9 59
AIP grants........................................ 2.4 21
PFCs.............................................. 1.6 13
State and local funds............................. 0.4 4
Airport revenue................................... 0.4 .........
---------------------
Total....................................... 11.8 100
------------------------------------------------------------------------
\1\ Figures provided by GAO.
It should be pointed out, however, the amount and type of
funding varies dramatically by size of airport. Larger airports
are much more dependent on bond financing and PFCs for their
capital needs. Smaller airports are disproportionally dependent
on AIP funds and state and local contributions. Changes to the
Federal statute governing the PFC will therefore generally be
of more interest to larger airports, while changes to the AIP
distribution formula will have a larger impact on the smaller
airports.
1. THE AIRPORT IMPROVEMENT PROGRAM (AIP)
The current authorization for the AIP program expires at the
end of FY 2003. Unlike most Federal programs, simply passing an
appropriations bill is not sufficient to allow AIP funds from
the Airport and Airway Trust Fund (AATF) to be released because
AIP is funded by contract authority which is mandatory spending
that must be included in an authorization Act. AATF funds are
derived from a variety of aviation user fees and fuel taxes. A
new authorization must be enacted by October 1, 2003, for funds
to flow from the trust fund for this program.
The FY 2003 enacted funding level for the program, as
authorized by the Aviation Investment and Reform Act for the
21st Century (AIR 21), is $3.4 billion. The President's budget
proposal for FY 2004 simply flat lines the program into the out
years at $3.4 billion--there is no proposed increase for
inflation. The Administration's budget proposal directed more
AIP funds toward medium and small airports, since they are most
dependent on AIP grants. This targeting would come at the
expense of the larger hub airports.
The funding for the AIP program is generally distributed
either by formula or as discretionary grants by the FAA. These
formulas and eligibility rules are set in statute and vary by
the type and size of airport. The following table shows how
funding is distributed by size of airport under current law and
how it would be distributed under the President's budget
request for FY 2004:
DISTRIBUTION OF AIP FUNDS BY TYPE OF AIRPORT \1\
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Airport category Formula Discretionary Total Percent
----------------------------------------------------------------------------------------------------------------
Current law
----------------------------------------------------------------------------------------------------------------
Large (66)................................................ $656 $488 $1,444 35%
Small (3423).............................................. $1,522 $647 $2,169 65%
-----------------------------------------------------
Total............................................... $2,178 $1,135 $3,313 100%
66% 34%
----------------------------------------------------------------------------------------------------------------
President's budget
----------------------------------------------------------------------------------------------------------------
Large (66)................................................ $286 $837 $1,123 34%
Small (3423).............................................. $1,508 $682 $2,190 66%
-----------------------------------------------------
Total............................................... $1,795 $1,518 $3,313 100%
54% 46%
----------------------------------------------------------------------------------------------------------------
\1\ Figures provided by GAO.
The table shows that the President's budget proposal would
shift formula grants even further from the larger airport
towards smaller ones. It also would increase the amount of
funds that would be available for discretionary distribution by
the FAA from the current 34 percent to 46 percent. The stated
purpose of this proposal is to concentrate the funding on those
airports that are most dependent on AIP funding, while
increasing the discretionary funding available to fund major
projects at large airports. In recent years, AIP discretionary
funds have been earmarked in the reports accompanying the
annual Transportation Appropriations bills for airports of all
sizes, leaving less discretion for the program.
In order to allow airports to proceed without having the full
Federal AIP contribution in hand, the FAA issues Letters of
Intent (LOIs). The LOI represents a nonbinding commitment from
the FAA to provide multi-year funding to an airport beyond the
current AIP authorization period. The airport can proceed on
the project without waiting for a future AIP grant because the
airport and investors know that allowable costs are likely to
be reimbursed. The FAA has 64 outstanding letters of intent
with a total commitment of about $3 billion; large and medium-
hub airports account for the majority of the total. In any
given year, the amount of AIP discretionary funds that are
committed under LOIs does not exceed 50 percent of the total
available for discretionary grants.
As a general rule, the Federal share of an AIP project's cost
is 90 percent. However, at medium and large hub airports, the
Federal share is 75 percent. In the case of a project involving
an airport terminal building, the Federal share is 85 percent
at non-hubs, and 75 percent at hubs.
During FY 2002, the FAA awarded a total of $561 million in
AIP grant funds to airports for security projects (17 percent
of the $3.3 billion available). This is almost an 800 percent
increase in security funding from AIP compared to prior years
and is the largest amount awarded to airports for security
projects in a single year since the program began in 1982.
Based on data provided by the FAA, all of the security projects
funded with AIP grants since the events of September 11, 2001,
met the legislative and program eligibility requirements. The
increase in funding for security projects came, however, at the
expense of more traditional projects like airport
rehabilitation.
2. PASSENGER FACILITY CHARGE (PFC)
During the late 1960's, a number of airports began collecting
a local ``head tax'' (the precursor of the PFC) on each paying
passenger boarding an aircraft. In 1973, the Airport
Development Acceleration Act banned the imposition of state and
local passenger charges.
In 1990, pressure on the Federal budget resulting from a
deficit led to a reconsideration of head taxes. Concerns that
the Aviation Trust Fund and other existing sources of funds for
airport development would be insufficient to meet national
airport needs led to the enactment of legislation that
authorized the PFC. The PFC is a local tax imposed, with
federal approval, by an airport on each boarding passenger. PFC
revenues can be used for a somewhat broader range of projects
than AIP grants and are more likely to be used for ``ground
side'' projects such as passenger terminal and ground access
improvements. PFCs can also be used for bond repayments.
The PFC was seen as being complementary to AIP funding, and
the Aviation Safety and Capacity Expansion Act of 1990 allowed
the Secretary of Transportation to authorize public agencies
that control commercial airports to impose a passenger facility
fee of $1, $2, or $3 on each paying passenger boarding an
aircraft at the airports. The money was limited to be used to
finance eligible airport-related capital projects defined in
law and, unlike AIP funds, could be used to make payments for
debt service or indebtedness incurred to carry out the
projects. There was a $3 cap on each airport's PFC and there
was a $12 limit on the total PFCs that a passenger could be
charged per round-trip.
AIR 21 increased the PFC ceiling to $4.50. However, to impose
a PFC over the $3 level, an airport has to show that the funded
projects will make significant improvements in air safety,
increase competition, reduce congestion or noise impacts on
communities, and that these projects could not be funded with
only AIP funds. Large and medium hub airports imposing PFCs
above the $3 level forego 75 percent of their AIP formula
funds. Beginning in FY 2001, PFCs at large and medium hub
airports may not be approved unless they have submitted a
written competition plan to the FAA. The competition plans are
to include information such as, the availability of gates,
leasing arrangements, gate-use requirements, patterns of air
service, controls over-air and ground-side capacity, intentions
to build gates that could be used as common facilities, and
airfare levels compared to other large airports.
FAA has approved PFCs at 332 airports and 308 are currently
collecting such charges. Last year, $2 billion was collected
and a comparable amount is expected to be collected this year.
As of December 2002, 28 large hub and 30 medium hub airports
had PFCs in place.
If a medium or large hub airport charges a $3 PFC, it must
forego up to 50 percent of its AIP passenger entitlement. If it
charges more than $3, it must forego 75 percent of its AIP
passenger entitlement. The foregone entitlements are directed
into a special small airport fund to be redistributed.
Because of the complementary relationship between AIP and
PFCs, PFC legislation is generally folded into the AIP
provisions of FAA reauthorization legislation.
IV. AIRPORTS SECURITY COSTS
The airport community is concerned about the cost of
complying with new Federal security requirements, especially
the costs associated with terminal modifications required to
accommodate explosive detection equipment.
The airports are requesting that new Federal resources
accompany Federal requirements. According to them, airport
operators can no longer absorb additional security costs
without serious consequences to capital improvement programs
and other airport operations. They contend that airports are
already stretched thin trying to deal with a number of unfunded
mandates imposed on them by the Federal government. In
addition, the AIP has already been tapped heavily for security-
related items, with more than $560 million in FY 2002 devoted
for security, up from $57 million the previous year. The
airports argue that without Federal assistance, they will have
no choice but to pass costs on to the airline industry.
Many of the mandates issued by the FAA and TSA to provide
additional law enforcement personnel, enhance airport
surveillance, and revalidate all airport-issued identification,
for example, remain unfunded. In FY 2002, Congress appropriated
$175 million to reimburse airports for a portion of these
costs. As part of the process of applying for those funds,
airports collectively submitted requests for $444 million in
expenses that the FAA deemed eligible expenditures for
reimbursement, leaving a roughly $270 million gap that airports
have been forced to absorb. An additional $150 million was
provided for reimbursement as part of the FY 2002 Supplemental
Appropriations Act, but those funds did not materialize because
the President rejected the ``contingent emergency'' portions of
the law.
At a February 5, 2003, Commerce Committee hearing, DOT
Inspector General Kenneth Mead stated the he believed that
``facility modifications (for security projects enhancements)
at airports could cost up to $5 billion.'' He added, ``if I was
the Congress, I would consider establishing a capital revolving
fund that would have private-sector and public-sector
representatives on the governing board. It would probably only
last for three, four, or five years. I would take a small
percentage of the AIP and send it to this revolving fund, and
that percentage would be calculated according to what the
historical spending patterns have been out of the AIP for
security. And I would take a certain percent of the passenger
fee that's already law, and I would drive that money into a
capital fund. Because you are going to need lots of capital
money when you go into these large airport terminals and start
taking apart the baggage systems. And I think you need a stable
funding source, for everybody's sake.''
V. SERVICE TO SMALL AND RURAL COMMUNITIES
Congress has long been concerned about airline service to
small and rural communities. When Congress deregulated the
airlines in the late 1970's, it also created the Essential Air
Service (EAS) program to ensure that communities that had been
receiving service before deregulation would continue to receive
service. In AIR 21, Congress created another program, the Small
Community Air Service Development Pilot Program, to experiment
with different approaches for attracting and retaining service.
Small communities are facing increasingly difficult
challenges not only in attracting new air service, but also in
retaining their current service. Many network air carriers
experiencing unprecedented financial losses are taking steps to
minimize losses such as cutting unprofitable service. As the
financial problems continue, and because service to small
communities is often relatively unprofitable, these communities
may be the hardest hit. In turn, this could place further
pressure on the EAS program as additional communities qualify
for Federally-subsidized air service. It could also increase
the demand for grants under the Small Community Air Service
Development Pilot Program, which in FY 2002, already had
requests far in excess of available funds.
A. THE ESSENTIAL AIR SERVICE PROGRAM (EAS)
Over two decades ago, the Congress deregulated the airline
industry, phasing out the Federal government's control over
domestic fares and routes served, and allowing market forces to
determine the price, quantity, and quality of service.
Concerned that air service to some small communities would
suffer in a deregulated environment, Congress established the
EAS program as part of the Airline Deregulation Act of 1978.
The Act guaranteed that communities served by air carriers
before deregulation would continue to receive a certain level
of scheduled air service.
In general, the Act guaranteed continued service by
authorizing the CAB, whose duties were later transferred to the
DOT, to require carriers to continue providing service at these
small communities. If an air carrier could not continue that
service without incurring a loss, DOT could then use EAS funds
to award that carrier, or another carrier willing to provide
service, a subsidy. These subsidies are intended to cover the
difference between a carrier's projected revenues and expenses,
and provide a minimum amount of profit.
As of February 1, 2003, the EAS program provided subsidies to
air carriers to serve 125 communities, 88 in the continental
United States and another 37 in Alaska, Hawaii, and Puerto
Rico. That number is expected to increase further, as
financially extended air carriers now providing unsubsidized
service to certain communities are likely to discontinue
service to cut costs.
To be eligible for subsidized service, communities must meet
three general requirements. They must have received scheduled
commercial passenger service as of October 1978; they must be
no closer than 70 highway miles to a medium- or large-hub
airport; and they must not require a subsidy of more than $200
per person (unless the community is more than 210 highway miles
from the nearest medium- or large-hub airport, in which case no
average per-passenger dollar limit applies).
Federal funding for the EAS program has more than tripled
since 1995, rising from $37 million to $113 million in FY 2002.
Over the same period, the average subsidy per community served
in the continental United States rose from nearly $424,000 in
1995, to an estimated $828,000 in 2002. For communities in
Alaska, Hawaii, and Puerto Rico, the average subsidy per
community served rose from just over $90,000, to an estimated
$251,000 in 2002.
Total passenger traffic at EAS-subsidized communities
decreased by 20 percent since 1995, and the median number of
passenger enplanements fell to an estimated 10 per day (an
average of just over 3 passengers per flight).
Several factors, including increasing carrier costs, limited
passenger revenue, and increasing numbers of eligible
communities requiring subsidized service, are likely to affect
potential future subsidy requirements of the EAS program.
Carriers' operating costs have increased over time, in part
because of costs associated with meeting Federal regulatory
requirements regarding safety in small aircraft. Carrier costs
may increase further if trends in the retirement of smaller
turboprop aircraft continue and carriers begin to use larger
aircraft on these routes. In contrast, carrier revenues have
been limited because many individuals traveling to or from EAS-
subsidized communities choose not to fly from the local
airport, but rather to use other, larger nearby airports, which
generally offer more service at lower airfares. Lastly, the
number of communities eligible for subsidies has increased, and
is likely to continue to grow in the near term.
B. THE SMALL COMMUNITY AIR SERVICE DEVELOPMENT PILOT PROGRAM
Congress first authorized the Small Community Air Service
Development Pilot Program as part of AIR 21 to help small
communities enhance their air service. Under this program, DOT
is authorized to award grants to 40 communities served by small
hub or nonhub airports that have demonstrated air service
deficiencies or higher than average airfares. Priority is given
to communities that provide local matching funds. AIR 21 also
contained provisions to allow DOT to work with and coordinate
efforts with other federal, state, and local agencies to
increase the viability of service to small communities, which
could include disseminating information on ``best practices''
identified by the program.
Congress appropriated $20 million for FY 2002 for this
program. While DOT had $20 million available for grants to 40
small communities under its Pilot Program, demand for the funds
far exceeded this amount. In all, DOT received 180 applications
from communities in 47 states, and the applications totaled
over $142.5 million, or more than seven times the amount
available. By December 2002, DOT had awarded grants totaling
about $20 million to 40 communities (or consortia of
communities). The grants, which ranged in size from $44,000 to
$1,557,500, were applied to such purposes as studies, marketing
programs, financial incentives, and other transportation
options.
The expectation in awarding such grants is that the
communities that receive them will be able to parlay such
grants into an ongoing program that can be self-sustaining. For
example, in a community that is trying to enhance its existing
service, the grant might help to provide a revenue guarantee to
the airline for the first months of the expanded operation,
with the expectation that the expanded service will stimulate
the market, creating a sustainable base of passengers. The
grants are not designed to be renewable. DOT received another
$20 million for the program in FY 2003 that has not yet been
distributed.
C. THE ADMINISTRATION PROPOSAL
In the FY 2004 Budget Submission, released in February 2003,
the Administration requested only $50 million for EAS and no
funding for the small community grant program. The EAS proposal
also would require a 25 percent local match, except for
communities that were more than 210 miles from the nearest
large or medium hub, in which case a 10 percent match would be
required. The Secretary would distribute the funds beginning
with the most isolated community willing to provide the match
and continue with the next most isolated, and so forth, until
the $50 million was exhausted. There also would no longer be a
minimum service requirement. In other words, the requirement
that communities be served at least twice a day could be
dropped in favor of air taxi, charter service, or even ground
transportation.
Summary of Provisions
MAJOR PROVISIONS OF S. 824, THE AVIATION INVESTMENT AND REVITALIZATION
VISION ACT (AIR-V)
A. FUNDING
The bill authorizes funding for the FAA for FY 2004 through
FY 2006. The major programs authorized are FAA operations,
facilities and equipment (which funds FAA air traffic control
modernization and replacement), the airport improvement
program, and research engineering and development. The table
below shows the funding levels:
FAA FUNDING SUMMARY
[Dollars in billions]
------------------------------------------------------------------------
2004 2005 2006 Total
------------------------------------------------------------------------
FAA operations...................... 7.6 7.7 7.9 23.2
Facilities and equipment............ 2.9 3.0 3.0 8.9
Airport improv. program............. 3.4 3.5 3.6 10.5
Research............................ 0.3 0.3 0.3 0.9
-----------------------------------
Total......................... 14.2 14.5 14.8 43.5
------------------------------------------------------------------------
The funding levels for FAA operations and for the
facilities and equipment account are at the levels requested in
the Administration proposal. The funding level for the AIP
would be increased by $100 million per year in FY 2005 and in
FY 2006. The Administration proposal would keep the funding
levels flat at the FY 2003 level of $3.4 billion. The research
levels are based on the authorized funding levels in S. 788,
the Second Century of Flight Act, introduced by Senators
Hollings, Brownback, Rockefeller, Inouye, Cantwell, and Kerry
on April 3, 2003.
AIR-V would extend through FY 2006, the AIR 21 spending
provisions requiring appropriations from the Airport and Airway
Trust Fund for FAA programs to be equal to receipts plus
interest credited to fund. The bill also extends through FY
2006 the AIR 21 provision giving priority and protections for
funding from the trust fund for the FAA capital programs. Any
funds above the taxes and interest that are required to fund
the operations account are derived from the general fund. The
AIR 21 funding ``guarantees'' that are enforced through points
of order in the Senate and in the House of Representatives, are
also continued.
B. STREAMLINING OF AIRPORT PROJECTS
AIR-V contains provisions designed to expedite the process
for construction of airport capacity and safety projects. The
environmental streamlining provisions in the bill would allow
DOT to designate certain airport expansion proposals as
National Capacity Projects, which would receive dedicated
resources and expedited procedures for environmental reviews.
In addition, these projects would receive priority
consideration for review and clearance by other federal
agencies. The bill also includes a pilot program intended to
allow airports to contribute to a fund that can be used by the
FAA to hire more personnel to handle the complex and time-
consuming work associated with current environmental reviews.
Many of these provisions were included in S. 633, the Aviation
Delay Prevention Act, which was reported out favorably by the
Committee during the last Congress.
C. AVIATION SECURITY
AIR-V contains a number of provisions related to aviation
security. Most importantly, the bill would create a new fund
which is financed with $500 million annually in security
service fees which are already being collected by the TSA. The
fund would be administered by the Secretary of Transportation
to make grants to airports to assist with capital security
costs. Estimates of the capital cost of modifying airports to
accept explosive detection system (EDS) equipment range from $3
billion to $5 billion. The source of funding for these costs
has not been clear. Again, in FY 2002, the FAA distributed $561
million in AIP grants toward these costs. The FAA has indicated
it is considering taking action to provide a similar amount in
FY 2003. Due to concern that the diversion of AIP grants to
security projects threatens to undermine important airport
capacity and safety projects, the bill tightens AIP eligibility
rules to prohibit the use of AIP for such purposes.
The bill also would require the Secretary of Homeland
Security to reevaluate the entire aviation security system,
submit a report to Congress on the results of the evaluation,
and to redeploy resources accordingly.
Legislative History
On April 8, 2003, Senator McCain introduced S.824, a bill
to reauthorize the FAA and its programs, as well as streamline
airport capacity projects and improve aviation security. The
bill was originally co-sponsored by Senators Hollings, Lott,
and Rockefeller. Sections of the bill regarding the
streamlining of airport capacity projects largely arose from
provisions provided in S. 633, the Aviation Delay Prevention
Act, which was reported favorably out of the Commerce Committee
in the 107th Congress. A substantial portion of the FAA's
research and development sections were essentially identical to
S. 2951, the Federal Aviation Administration Research,
Engineering, and Development Act of 2002, which also was
reported favorably out of the Commerce Committee and passed by
the Senate during the 107th Congress.
On April 10, 2003, the Commerce Committee held a hearing on
S. 824.
On May 1, 2003, the Committee ordered S. 824 to be reported
favorably with an amendment in the nature of a substitute.
Estimated Costs
In compliance with subsection (a)(3) of paragraph 11 of
rule XXVI of the Standing Rules of the Senate, the Committee
states that, in its opinion, it is necessary to dispense with
the requirements of paragraphs (1) and (2) of that subsection
in order to expedite the business of the Senate.
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:
S. 824 would create a new program requiring the FAA to
certify flight attendants. Complying with the requirement is
expected to have some impact on air carriers. The air carriers,
however, already have to comply with the FAA's and the TSA's
requirements for training flight attendants, so the impact
should be incremental. Other impacts of provisions in the bill
should be minor.
NUMBER OF PERSONS COVERED
S. 824 would reauthorize FAA programs and is intended to
improve airport capacity management and reduce airport
congestion in the United States. The number of persons covered
should be consistent with current levels of individuals
effected.
ECONOMIC IMPACT
S. 824 would authorize funds for the FAA's programs. These
programs are intended to sustain and promote aviation safety,
security, and efficiency. Adequate levels of safety, security,
and efficiency as well as the promotion of the free flow of
people and products, are essential to sound air commerce. This
legislation will work toward ensuring an environment conducive
to economic opportunity. Other sections of the bill are
intended to improve the nation's airport capacity needs and
should have a beneficial impact on the economy of the United
States.
PRIVACY
S. 824 is not expected to have an adverse effect on the
personal privacy of any individuals that will be impacted by
this legislation.
PAPERWORK
S. 824 would have a minimal impact on current paperwork
levels, and seeks to reduce duplication in some areas. The
legislation requires the DOT to identify reasonable
alternatives that exist to capacity enhancement projects for
publication in the Federal Register, and to identify airports
which cause significant delays to the national air
transportation system. Airports that are identified as
contributing considerably to air traffic delays in the United
States will be required to generate a study on the matter, or
develop a task force to submit recommendations for capacity
enhancement.
Airports also would be required to report to the Secretary of
Transportation when they deny an air carrier access to a gate.
Section-by-Section Analysis
Sec. 1. Short Title; Amendment of Title 49
This section provides that the Act may be cited as The
Aviation Investment and Revitalization Vision Act (AIR-V). This
section provides that, except where otherwise expressly
provided, any references to sections or provisions are made to
title 49, United States Code.
Sec. 2. Table of Contents
This section contains the table of contents.
TITLE I--REAUTHORIZATIONS; FAA MANAGEMENT
Sec. 101. Airport Improvement Program
Section 101 authorizes $3.4 billion in FY 2004; $3.5 billion
in FY 2005; and $3.6 billion in FY 2006 for the Airport
Improvement Program. In addition, the Administration may expend
from these authorized funds for administrative expenses
provided they do not exceed $69.7 million for FY 2004; $71.8
million for FY 2005; and $74.0 million for FY 2006.
Sec. 102. Airway Facilities Improvement Program
This section authorizes $2.9 billion in FY 2004; $2.97
billion in FY 2005; and $3.0 billion in FY 2006 for the Airway
Facilities Improvement Program. It also requires a report on
major FAA modernization programs.
Sec. 103. FAA Operations
This section authorizes funding for FAA Operations at $7.6
billion for FY 2004; $7.7 billion for FY 2005; and $7.9 billion
for FY 2006. The Committee is aware that the FAA, as part of
its annual Budget Submission, provides information on training
funds for inspectors. Rather than request a separate report,
the Committee will continue to review the amounts provided for
inspector training through the Budget Submission.
Sec. 104. Research, Engineering, and Development
This section authorizes funding for Research, Engineering,
and Development at $289 million for FY 2004; $304 million for
FY 2005; and $317 million for FY 2006.
Sec. 105. Other Programs
This section extends to FY 2006 the AIR 21 formula
determining the Airport and Airways Trust Fund share of the FAA
budget.
Sec. 106. Reorganization of the Air Traffic Services Subcommittee.
This section changes the Air Traffic Subcommittee, created in
AIR 21, from a subcommittee of the Management Advisory Council
to a free-standing Committee. The Administrator will serve as
Chair, with the Secretary of Transportation to appoint the
additional 4 members of the 5 member board. No appointed
Committee member may be a United States government employee.
With the exception of the Committee's current appointees,
subsequent appointees will have 3 year terms.
Sec. 107. Responsibilities of the COO
This section clarifies the FAA's Chief Operating Officer
(COO) responsibilities for managing the FAA's air traffic
control system. Although the legislation that established the
position of COO was clear that the position was that of a Chief
Operating Officer, some of the functions that the statute
currently bestows upon the position, specifically those related
to developing (rather than implementing) the agency's strategic
plan and its budget, are those more in line with the position
of a Chief Executive Officer (CEO). The amendments clarify that
the COO would be responsible for the day-to-day operational
functions of the air traffic control organization.
TITLE II--AIRPORT DEVELOPMENT
Sec. 201. National Capacity Projects
This section adds a new chapter 477 to title 49 entitled
National Capacity Projects.
Sec. 47701. Capacity Enhancement
This new section requires the Secretary to identify any large
hub airports with delays that markedly affect the national air
transportation system. Any airport that is identified and is
not currently participating in the runway expansion process or
has not begun a capacity enhancement study (CES) must perform a
CES or establish a delay reduction task force to report to the
Secretary. Any airport that is the subject of a report or study
recommending construction in response to delays must have the
planning and environmental review process to address this
matter completed within 5 years. Any airport that does not take
recommended expansion action will be ineligible for federal
planning and expansion funds or approval of passenger facility
fees during that 5-year period for any projects that are not
environment, safety, or security-related.
Sec. 47702. Designation of National Capacity Projects
This new section allows the Secretary to designate projects
that are determined to have a significant impact on enhancing
the national air transportation system as national capacity
projects.
Sec. 47703. Expedited Coordinated Environmental Review Process; Project
Coordinators and Environment Impact Teams
This section requires DOT to develop and implement an
expedited, coordinated environmental review process that
encompasses all Federal, state, regional, and local agencies'
reviews for airport projects. This process would provide for
concurrent reviews and conclude by a date certain. The
Secretary also will be required to start a pilot program to be
funded by airport sponsors to improve environmental review of
national capacity projects. The pilot program will provide for
the hiring of full-time staff from outside the United States
Government with an expertise in environmental policy. The
Committee is aware that a number of large projects, like Sea-
Tac in Seattle, have gotten caught up in Federal agency
bureaucratic disputes, causing substantial delay in
construction of the project. This section seeks to end such
bureaucratic wrangling.
Sec. 47704. Compatible Land Use Initiative for National Capacity
Projects
The Secretary is also empowered to make grants to state,
local government, and airports for land use compatibility plans
directly related to national capacity projects.
Sec. 47705. Air Traffic Procedures at National Capacity Projects
This section provides the Secretary the option of prescribing
air traffic procedures at facilities that are working on
national capacity projects in an effort to minimize any adverse
impacts of construction.
Sec. 47706. Pilot Program for Environmental Review at National Capacity
Projects
The Secretary also will be required to start a pilot program
to be funded by airport sponsors to improve environmental
review of national capacity projects. The pilot program will
provide for the hiring of full-time staff from outside the
United States government with an expertise in environmental
policy.
Sec. 47707. Definitions
This section sets out definitions for ``national capacity
project,'' and other terms based on existing statutory
meanings.
Sec. 202. Categorical Exclusions
Section 202 requires the Secretary to provide a report on
recognized and proposed categorical exclusions from an
environmental assessment or environmental impact statement
(EIS) on airport projects to the Committee within 30 days of
enactment of the Act. It does not change existing procedures
under NEPA.
Sec. 203. Alternative Analysis
Section 203 requires the Secretary to request public comments
within 30 days of identifying airport enhancement projects to
examine potential alternatives. Sixty days will be provided for
public comment, and within 90 days after that point the
Secretary will make the determination whether reasonable
alternatives exist to the proposed project.
Sec. 204. Increase in Apportionment For, and Flexibility of, Noise
Compatibility Planning Programs
Section 204 amends the U.S. Code to ensure that at least 35
percent of special apportionment grants are used to address
airport noise compatibility planning issues.
Sec. 205. Secretary of Transportation To Identify Airport Congestion-
Relief Projects and Forecast Airport Operations Annually
Section 205 requires the Secretary to provide to the
Committee within 90 days of enactment of this legislation a
list of planned projects and a list of options for expanding
capacity at the 8 airports with the most severe delays.
Sec. 206. Design-Build Contracting
This section extends the pilot program, contained in AIR 21,
to allow desion-build contracting for federally assisted
airport projects. The Administrator may approve a design-build
contract if (1) the Administrator approves the application
using criteria established by the Administrator; (2) the
design-build contract is in a form that is approved by the
Administrator; (3) the Administrator is satisfied that the
contract will be executed pursuant to competitive procedures
and contains schematic designs adequate for the Administrator
to approve grant; (4) use of a design build contract will be
cost effective and expedite the project; (5) the Administrator
is satisfied that there will be no conflict of interest; and
(6) the Administrator is satisfied the selection process will
be open, fair, and objective and that at least three or more
bids will be submitted for each project under the selection
process.
(b) The Administrator may reimburse an airport sponsor for
design and construction costs incurred before a grant is made
if the project is approved by the Administrator in advance and
is carried out in accordance with all administrative and
statutory requirements.
(c) Design-Build contract is defined as an agreement that
provides for both design and construction of a project by the
contractor.
Sec. 207. Special Rule for Airports in Illinois
Section 207 retains the power of the Governor of Illinois to
approve or disapprove airport projects in the State, but
ensures that the provisions of the Act may be applied to
projects in Illinois, and that airports in the state would be
eligible to utilize the expedited process. This provision is
similar to the provision included in S. 633 from the 107th
Congress.
Sec. 208. Elimination of Duplicative Requirements
Section 208 eliminates redundant requirements in chapter 471
regarding project grant applications for airport development.
Sec. 209. Streamlining the Passenger Facility Fee Program
This section would amend current PFC consultation
requirements with air carriers to require consultation only
with those carriers whose passengers will be charged a PFC. It
also would delete the requirement for significant contribution
tests since previous requirements are deemed adequate and the
current requirement creates complicated collection schedules.
This section also establishes a pilot program for smaller
airports to implement a fee unless Secretary overrules such
action.
Sec. 210. Quarterly Status Reports
In the second calender quarter after the date of enactment,
the Secretary of Transportation shall provide quarterly status
reports to the Senate Committee on Commerce, Science, and
Transportation and the House of Representatives Committee on
Transportation and Infrastructure on the status of construction
of major runway projects at the 40 largest airports
Sec. 211. Noise Disclosure Requirements
The purpose of this section is to increase prospective home
buyers' awareness of areas near airports that are exposed to
aircraft noise by requiring notice that certain properties are
subject to noise, as depicted on noise exposure maps. This
notice is required for approval of a loan by federally
regulated lenders and Federal agency lenders.
To assure that noise exposure maps made available for noise
disclosure are reasonably up to date, this section also would
amend the requirements for revising noise exposure maps by
adding a new requirement that noise exposure maps be revised if
there is any significant reduction in noise contours depicted
on a previously submitted noise exposure map. Under current
law, such revisions are required only where an increase in
noise results in a substantial new incompatible use.
Sec. 212. Prohibition on Requiring Airports To Provide Rent-Free Space
for FAA or TSA
Neither TSA nor FAA may require airport sponsors to provide
space at airport sponsor-owned buildings to FAA or TSA without
cost for services relating to air traffic control, air
navigation, aviation security, or weather reporting. This does
not prohibit agreements from being made between these parties
without cost or with below market rates, nor does it prohibit a
Secretary from requiring an airport sponsor to provide land
without cost to FAA for air traffic control facilities or space
without cost to the TSA for necessary security checkpoints.
Sec. 213. Rules for Fiscal Year 2004
Section 213 increases from 90 percent to 95 percent, the
federal governments funding share for projects funded by State
block grant programs for nonhub and small hub projects for FY
2004. It also holds harmless, for one year, airports whose
enplanements have dropped due to reduced travel.
Sec. 214. Agreements for Operation of Airport Facilities
Section 214 authorizes $6.5 million in FY 2004, $7.0 million
in FY 2005, and $7.5 million in FY 2006 for funding for the
Control Tower Program.
Sec. 215. Public Agencies
Section 215 allows the Department of Interior to apply for
AIP for an airport owned by the Department that is required to
be maintained for commercial aviation safety at a remote
location.
Sec. 216. Flexible Funding for Nonprimary Airports to Apportionments
This section aligns the uses of apportionments to nonprimary
airports with those permitted for primary airports. It would
permit these apportionments to be used at any other airport
owned by the same sponsor; and would allow the sharing of
apportionments by the transfer of the apportionment to another
airport within the same state or geographical area.
TITLE III--AIRLINE SERVICE DEVELOPMENT
SUBTITLE A--PROGRAM ENHANCEMENTS
Sec. 301. Delay Reduction Meetings
Section 301 allows the Secretary to call for meetings between
air carriers and the FAA Administrator to consider flight
reductions at heavily congested airports if the Secretary and
Administrator determine that conditions necessitate such
discussions. Any meetings that are called will be chaired by
the Administrator and will be open to all scheduled air
carriers only to discuss the conditions that prompted the
meeting, and the air carriers must be informed of these
conditions at least two days prior to meeting. Any delay
reduction proposals are required to be made to the
Administrator rather than to another carrier. The DOT is
required to be represented at any meetings, and the
Administrator must make a transcript of the meeting available
to the public within three working days.
This section also mandates that the Secretary develop
procedures for this program within 30 days, and requests air
carriers to file a request with the Secretary to participate in
this program. The Secretary also will have the option of
developing a program to address the unique situation presented
by inclement weather. In addition, it provides the same
immunity afforded under the Clayton Act.
Sec. 302. Small Community Air Service Development Pilot Program
This section extends the small community air service
development pilot program, established in AIR 21, until 2006
with funding of $27.5 million per year for the 3 year
extension. It also clarifies that 40 communities per year may
participate and that no community may participate in the
program twice. It also clarifies eligibility for the programs
Airport Development Zone; which DOT initially limited to one
report, contrary to the law's original intent.
Sec. 303. DOT Study of Competition and Access Problems at Large and
Medium Hub Airports
This section instructs the Secretary of Transportation to
study competition and airline access problems at hub airports.
Specifically gate usage and availability; and effects of
pricing of gates and other facilities on competition and access
should be studied. Within 6 months, the Secretary's findings,
conclusion, and recommendations are to be submitted to the
Senate Committee on Commerce, Science, and Transportation and
the House of Representatives Committee on Transportation and
Infrastructure.
Sec. 304. Competition Disclosure Requirements for Large and Medium Hub
Airports
This section requires that airports which deny applications
by an air carrier for access to gates or other facilities
submit to the Secretary notification of the denial and a report
explaining the reasons for the denial and a time line, if any,
by which the request will be accommodated.
SUBTITLE B--SMALL COMMUNITY AND RURAL AIR SERVICE REVITALIZATION
Sec. 351. Essential Air Service Reauthorization
This section extends the current funding levels for 3 years.
Sec. 352. Incentive Program
This section establishes a ``Marketing Incentive Program'' as
part of the EAS program, aimed at increasing ridership,
reducing subsidy costs, and developing opportunities to improve
the service to EAS communities.
The section directs the Secretary of the Transportation to
establish a program though which eligible EAS communities may
receive grants of up to $50,000 from the Department to develop
and implement a plan to increase passenger use and boardings at
their airport. Under the grant program, at least 25 percent of
the public costs associated with a community's plan must come
from non-Federal sources which may be financed through in-kind
contributions or with proceeds from the sale of bonds, but may
not come, directly or indirectly, from other forms of Federal
funding. If the Secretary determines that a community
participating in the marketing program has increased average
monthly boardings or the level of passenger usage at their
airport by at least 25 percent over any one-year period while
the program has been in effect, then only 10 percent of the
costs associated with the marketing plan must come from non-
Federal sources for the following year. If the Secretary
determines that a community participating in the marketing
program has increased average monthly boardings or the level of
passenger usage at their airport by at least 50 percent over
any one-year period while the program has been in effect, then
none of the publicly financed costs associated with the
marketing plan must come from non-Federal sources for the
following year.
The section allows the Secretary to provide any State with an
eligible EAS community up to $50,000 to assist the State and
associated communities in improving their ability to increase
passenger boardings at these locales, with the requirement that
at least 10 percent of the costs associated with this effort
are from non-Federal sources, including in-kind contributions.
The section authorizes $12,000,000 for each of fiscal years
2004 through 2007 to fund the Marketing Incentive Program with
the requirement that not more than $200,000 be used for
administrative costs in any given year. The section also
defines four terms for use in the sub-chapter.
Sec. 353. Pilot Programs
Section 353 directs the Secretary of Transportation to create
a number of pilot programs for improving service at EAS
communities. The programs that must be developed include:
A Community Flexibility program for up to 10 communities
under which a locale may decide to opt-out of the EAS program
for a period of 10 years in exchange for a grant equivalent to
2 years of EAS assistance for such locales to improve their
existing aviation facility;
An Equipment Changes program for up to 10 communities through
which a locale may request the use of smaller equipment to
improve service as long as such a change does not compromise
safety;
An Alternative Services program for any three airport
sponsors under which the Secretary can provide a locale 100
percent of the funding necessary to establish a reasonable
amount of alternative transportation from the participating
facility to the closest hub or small-hub airport with the
airport sponsor authorized to use its EAS funding for any
project that would improve the existing facility, and the
option of exiting the pilot program at any time after one-year
of participation;
A Cost-Sharing program under which the airport sponsors of
EAS locales may share in the cost of improved service above the
basic EAS subsidy they are provided; and,
A Local Participation program under which the Secretary
selects 10 EAS communities that are within 100 miles of a hub
airport that must pay a 10 percent share for three year period.
Any of the communities selected are automatically eligible for
the other pilot programs. Travel time may be considered in
determining which communities will participate. In addition, no
more than one community per state may be designated, and chosen
communities may appeal that designation. Participating
communities may use in-kind contributions when providing their
share, and are not precluded in participating in any other
pilot programs in this section. The section permits a Code-
Sharing program under which the Secretary may require air
carriers providing service to EAS communities, along with major
air carriers serving larger destinations, to participate in
multiple code-sharing arrangements that would improve air
transportation service. It also mandates that the Secretary
require EAS providers to track changes in service, and that
communities seeking to participate in any of these programs
submit an application as determined by the Department of
Transportation.
Sec. 354. EAS Program Authority Changes
Section 354 permits the Secretary of Transportation to
increase the current rate of compensation to EAS providers that
have experienced an average monthly cost increase of ten
percent or more. In addition, any funds that are reimbursed to
the Department as a result of decreased subsidy needs will be
provided to the Secretary and may be used to increase flights
at that airport.
TITLE IV--AVIATION SECURITY
Sec. 401. Study of Effectiveness of Transportation Security System
The section instructs the Secretary of the Department of
Homeland Security to study the effectiveness of the aviation
security system. Within 6 months the Secretary's findings,
conclusions and recommendations will be submitted to the Senate
Committee on Commerce, Science, and Transportation and the
House of Representatives Committee on Transportation and
Infrastructure. The Secretary is directed to redeploy resources
based on the results of the study.
Sec. 402. Aviation Security Capital Fund
This section establishes the Aviation Security Capital Fund
which is financed with $500 million annually in security
service fees which are already collected by the Transportation
Security Administration (TSA). The Fund is administered by the
Secretary of Transportation and will make grants to airports to
assist with capital security costs. The Fund will allocate 40
percent to hub airports; 20 percent to medium hub airports; 15
percent to small hub airports; and 25 percent distributed at
the Secretary's discretion to address security risks. Airport
apportionment is based on a formula based on the ratio of
passenger enplanements at each airport bears to total passenger
enplanements. The funds should enable DOT to reimburse and fund
actions taken since September 11, 2001, to improve security.
Sec. 403. Modification of Security-Related Airport Development
Definition
This section modifies the definition of ``Airport
Development'' to remove the eligibility for airport capital
costs associated with installing explosive detection system
equipment. Such costs would be funded from the Aviation
Security Capital Fund.
Sec. 404. Armed Forces Charter
This section provides that the Armed Forces are not subject
to the same security rules as commercial charters.
TITLE V--MISCELLANEOUS
Sec. 501. Extension of War Risk Insurance Authority
This section extends the Secretary of Transportation's
underlying authority to issue war-risk insurance through
calendar year 2006. This authority currently expires at the end
of calendar year 2004.
Sec. 502. Cost-Sharing of Air Traffic Modernization Projects
This section would provide permanent authorization for a
successful pilot program that was enacted as part of AIR 21
(see section 304 of Pub.L. 106-181, Apr. 8, 2000) to encourage
non-Federal investment in critical air traffic facilities and
equipment. The 3-year pilot program allowed for cost sharing
between FAA and airports or joint ventures of airports and air
carriers, of not more than 10 air traffic modernization
projects. In FY 2001, 5 cost-sharing projects were awarded and
5 more were awarded in FY 2002. The program allowed FAA to
facilitate the modernization of the national airspace system
(NAS) in areas where Federal funds were not available to meet
all needs. Given the success of the program, section 203 would
make the AIR-21 provision a permanent program under chapter 445
of title 49, and propose several changes to its terms: limit
the Federal share for each project to $5 million instead of $15
million; expand the eligibility of those who may participate to
any major user of the NAS (e.g. air carriers would not have to
be in a joint venture with an airport in order to participate);
permit the funding of up to 10 projects per fiscal year; and
clarify that any facilities or equipment funded by the program
that may be transferred to the FAA are transferred with the
FAA's consent and meet FAA standards.
Sec. 503. Counterfeit or Fraudulently Represented Parts
This section would direct the FAA Administrator to deny the
certification of a person who knowingly, and with the intent to
defraud, carried out or facilitated an activity relating to
counterfeit or fraudulently represented aviation parts or
materials, and otherwise punishable by law. The person denied
certification could be an individual or entity that carried out
or facilitated such activity, or an entity subject to a
controlling or ownership interest of an individual who carried
out or facilitated such activity. This section also would
direct the FAA Administrator to deny the certification of a
person whose certificate had been previously revoked for
involvement in an activity relating to counterfeit or
fraudulent parts. With this modification, the basis for
certificate denial would be expanded to include those that are
the basis for certificate revocation.
Sec. 504. Clarifications to Procurement Authority
Subsection (a)(1) removes obsolete references in current law
by deleting subparagraphs granting the Administrator authority
under certain statutes (the Office of Federal Procurement
Policy Act (41 U.S.C. 414(3)) and the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 253)), that,
because of procurement reform, no longer apply to FAA
acquisitions. In addition, the amendment clarifies that the
acquisition management system used by FAA must provide for more
timely and cost-effective acquisitions of services as well as
equipment and materials. The amendment also deletes the
compliance date of January 1, 1996, which is now obsolete since
the FAA has implemented the system.
Sec. 505. Judicial Review
Section 505 would amend the judicial review provision in
chapter 461 of title 49 to clarify that decisions to take
actions authorizing airport development projects are reviewable
in the circuit courts of appeals under section 46110,
notwithstanding the nature of the petitioner's objections to
the decision. This provision also would clarify that FAA orders
pertaining to airport compliance are exclusively reviewable in
the Circuit Courts of Appeals, like other orders issued under
similar provision in Part B of subtitle VII of title 49. The
modification is necessary because of a recent court decision
that, in FAA's view, wrongly interpreted current law. It also
would clarify that orders of the Transportation Security
Administration under 49 U.S.C. 114(s) (relating to
nondisclosure of security activities) are similarly treated.
Section 505 would resolve the jurisdictional issue in City of
Alameda v. FAA, 285 F.3d 1143 (9th Cir. 2002) to reflect the
holding in Suburban O'Hare Comm'n v. Dole, 787 F.2d 186 (7th
Cir. 1986) and its progeny. Until City of Los Angeles v. FAA,
239 F.3d 1033 (9th Cir. 2001) and City of Alameda, it was
settled law that FAA decisions that included approval of
airport layout plans were exclusively reviewable in the Circuit
Courts of Appeals. The leading case in this area, Suburban
O'Hare, held that the circuit court of appeals had exclusive
jurisdiction under 46110 to review FAA's decision authorizing
approval of the airport layout plan and other actions to
support new runways and related development at Chicago's O'Hare
airport.
Sec. 506. Civil Penalties
This section would amend the general civil penalty provision
of subtitle VII of title 49, governing the civil penalties for
violations of aviation law, to make uniform and increase, the
maximum civil penalty for each violation at $25,000 per
violation. The section would affect penalties for both safety,
civil rights, and economic violations.
Under current law violations of some provisions enforced by
the FAA are subject to a $1,000 civil penalty (those committed
by individuals, airports, manufacturers, aircraft maintenance
facilities, etc.) and others (those committed by air carriers)
are subject to a $10,000 penalty. The increased level is needed
to make the penalty for violations more effective and to bring
it more in line with recent enactments. For example, in AIR 21,
the penalty for ``air rage'' violations was set at $25,000 (see
section 511 of Pub. L. 106-181, Apr. 5, 2000). Similarly, the
penalty for violations of requirements for transportation of
hazardous materials is now set at $25,000. More recently in the
Homeland Security Act of 2002 (see section 1602 of Pub. L. 107-
296, Nov. 25, 2002), the maximum penalty for security
violations by air carriers also was increased to $25,000 (it
was increased to a maximum of $10,000 for non-air carrier
violators).
The section also would amend penalties for violations of
provisions enforced by the Office of the Secretary. This
section applies generally to the activities of commercial air
carriers. Among the enforcement responsibilities relating to
the economic regulation of air carriers are the enforcement of:
(1) restrictions on the extent of air carrier's operations; (2)
the reporting of required financial and traffic data; (3)
prohibitions on unfair and deceptive trade practices; and (4)
prohibitions of discriminatory treatment by air carriers of
individuals based on race, ethnicity or disability. Under
current law, there are a number of different civil penalties
applicable to these kinds of violations. The general penalty
provision of $1,000 (raised to $1,100 by regulation to reflect
inflation) applies to most unauthorized operations and
reporting violations; a penalty of $2,500 applies to violations
of 49 U.S.C. 41712 regarding unfair and deceptive trade
practices; and a $10,000 penalty applies to violations of 49
U.S.C. section 41705 relating to discriminatory treatment of
disabled individuals, while a $2,500 penalty applies to other
forms of discrimination under 49 U.S.C. section 40127. This
section would apply a uniform civil penalty of $25,000 to all
violations of economic statutes or rules. The section ensures
that more serious violations of title 49, such as violations
involving discriminatory conduct, are not subject to a lower
maximum penalty than less serious infractions.
In addition, this section clarifies that violations of
sections 40127 and 41712 would not be limited to $2,500. An
additional clarification is needed with respect to current
section 46301(a)(7).
Subsection (b) of this section also would alter a cap on the
FAA's authority to administratively determine a civil penalty.
Currently, the FAA's authority is limited to $50,000, (i.e.
cases involving a finding of violations with civil penalties in
excess of $50,000 must be referred to the United States
Attorney for prosecution). This section increases the limit to
$1 million.
Sec. 507. Miscellaneous Amendments
Subsection (a), (b), and (c) make a number of technical
changes recommended by the General Accounting Office to clarify
the FAA's management of funds in the AIP program.
Subsection (d) permits the use of AIP funds for safety data
collection and that the recipient of the grant may be a private
company. The safety data provides information that is useful
for AIP funding and airport planning decisions. Not all states
collect such data, and a private entity may be able to fill in
any gaps that exist.
Subsection (e) expands a statute of limitation provision
involving revenue use to other local governments. When a
sponsor contributes capital or subsidizes airport operations,
existing law allows the sponsor to claim reimbursement for such
contributions within 6 years of occurrence. This amendment
would extend this policy to other governmental entities in
order to recognize that such entities also contribute capital
or operating costs to airports.
Subsection (f) clarifies the review of revenue use through
the annual audit activities under the Single Audit Act. Current
law, 49 U.S.C. 47107(m), requires the FAA to regulate in an
area that has historically been overseen by the Office of
Management and Budget (OMB). OMB's exclusive authority is
intended to ensure auditing consistency across all Federal
agencies. The proposed amendments to 47107(m) will correct this
situation by replacing language directing FAA to promulgate
regulations with language referencing FAA's appropriate
compliance role, while still maintaining Congress's intent that
Single Audits include a review of the use of airport revenues.
Subsection (g) updates a provision in the Aviation Safety and
Noise Abatement Act of 1979, recodified as section 47503, to
conform language to the original congressional intent of the
provision that the forecast year for airport noise exposure
maps should reflect conditions at least five years into the
future. The current language, stating that ``1985'' is the
five-year forecast time frame, is outdated.
Subsection (h) would amend section 40117 to clarify that
passengers on military charters of commercial aircraft are not
subject to collection of a passenger facility fee.
Sec. 508. Low Emission Airport Vehicles and Infrastructure
This section expands the eligibility for AIP and PFC to the
acquisition of airport-owned vehicles and airport-owned ground
support equipment, or conversion of such equipment, to low
emission technology, for infrastructure to support low emission
airport vehicles, for gate electrification, and other related
air quality improvements at commercial service airports in
nonattainment and maintenance air quality areas. The section
includes a provision for the Secretary to work with the EPA
Administrator to develop an agreement, with specified
conditions, on how airports will receive emission credits for
voluntary emission reductions. The provision would require
appropriate credits as a condition for AIP funding. Finally, a
pilot program is proposed at not more than 10 commercial
service airports to fund the retrofit of conventionally fueled
airport ground support equipment using emission control
technologies in order to evaluate the benefit-cost of such
retrofits.
Sec. 509. Low Emission Airport Vehicles and Ground Support Equipment
This section permits the use of PFC revenue, but not AIP, for
the incremental cost of the acquisition or conversion of ground
support equipment or airport-owned vehicles to low emission
technology or cleaner burning conventional fuels, at commercial
service airports in nonattainment or maintenance air quality
areas. PFC funding would be conditioned on the provision of
appropriate emission credits to the airport, as in section 508.
PFC could also be used for conventional fuel retrofitting with
certified emission control technologies.
Sec. 510. Pacific Emergency Diversion Airport
This section directs the Secretary of Transportation to reach
an MOU with the Secretaries of Defense, the Interior, and
Homeland Security, to facilitate the sale of aircraft fuel on
Midway Island, so that the revenue from the fuel sales can be
used to operate Midway Island Airport in accordance with
Federal Aviation Administration airport standards.
Sec. 511. Gulf of Mexico Aviation Service Improvements
This section allows the Secretary of Transportation to
develop a program to expand and improve the safety, efficiency,
and security of air traffic control and aviation-related
navigation, low altitude communications, surveillance, and
weather services in the Gulf of Mexico.
Sec. 512. Air Traffic Control Collegiate Training Initiative
This section allows the FAA to spend funds to support the Air
Traffic Control Collegiate Training Initiative.
Sec. 513. Increase in Certain Slots
This section increases the number of beyond the perimeter
slots at Ronald Reagan Washington National Airport by 12.
Sec. 514. Air Transportation Oversight System Plan
This section requires the FAA to submit a plan of action to
the Congress for addressing identified problems with the Air
Transportation Oversight System.
Sec. 515. National Small Community Air Service Development Ombudsman
This section establishes the position of National Small
Community Air Service Development Ombudsman.
Sec. 516. National Commission on Small Community Air Service
This section establishes a National Commission on Small
Community Air Service.
Sec. 517. Training Certification for Cabin Crew
This section requires the FAA to issue certificates to cabin
crew members that complete certain training.
Sec. 518. Aircraft Manufacturer Insurance
This section extends war-risk insurance to certain aircraft
manufacturers.
Sec. 519. Ground-Based Precision Navigational Aids
This section authorizes a program for ground-based precision
navigational aids for terrain-challenged airports.
Sec. 520. Stand by Power Efficiency Program
This section authorizes a program to increase energy
efficiency and cost-effectiveness, and encourage the use of
fuel cell technology, in meeting the Federal Aviation
Administration's standby power needs.
TITLE VI--SECOND CENTURY OF FLIGHT
Sec. 601. Findings
Section 601 presents fourteen findings of Congress that
explain the purpose of, and need for title VI.
SUBTITLE A--THE OFFICE OF AEROSPACE AND AVIATION LIAISON
Sec. 621. Office of Aerospace and Aviation Liaison
This section establishes the Office of Aerospace and Aviation
Liaison within the Department of Transportation. This office is
charged with coordinating aviation and aeronautics research
programs, activities, goals, and priorities within the Federal
Government, and directed to include private United States
aviation and aeronautical firms in this effort. Areas of
responsibility include: air traffic control, technology
transfer from government programs to the private sector, noise,
emissions, fuel consumption, and safety. It also requires the
Office to provide a plan and an annual report to Congress. It
authorizes $2,000,000 for FY 2004 and FY 2005.
Sec. 622. National Air Traffic Management System Development Office
This section establishes a National Air Traffic Management
System Development Office within the FAA with the mission of
developing a next generation air traffic management system plan
for the United States. This plan is required to focus on
transforming the national airspace system to meet air
transportation mobility, efficiency, and capacity needs beyond
those currently included in the FAA's Operational Evolution
Plan (OEP) in an effort to build on existing capabilities while
improving the security, safety, quality, and affordability of
the system. In pursuing this mandate, the plan must employ a
system-of-systems multi-agency approach while developing an
integrated and secure architecture that ensures as seamless a
global operation as possible.
The office is required to include personnel from the various
Federal agencies, and to consult private industry and other
interested parties. It authorizes $300,000,000 for FYs 2004
through 2010.
Sec. 623. Report on Certain Market Development and Government Policies
This section requires the Office of Aerospace and Aviation
Liaison to issue a report within 6 months on market
developments and government policies influencing the
competitiveness of the United States jet transport aircraft
industry. Specifically this report should include comparisons
to the European Union and global market factors affecting the
jet transport industries in the United States.
SUBTITLE B--TECHNICAL PROGRAMS
Sec. 641. Aerospace Workforce Initiative
This section directs NASA and the FAA to establish a joint
program of competitive, merit-based, multi-year grants for
eligible applicants to increase the number of students studying
in technical training programs, certificate programs,
associate, bachelor's, or master's degrees in fields related to
aerospace and aviation safety. The Director of the joint
program is required to consider ways to increase the level of
students participating in these types of aerospace and aviation
studies when developing the grant programs. It authorizes such
sums as necessary for NASA and FAA to carry out this section in
FY 2004, and requires a report to Congress to advise whether
this program should be extended with a budget and plan for
conducting the program. The Committee expects to continue to
review this section to best address ways to encourage people to
enter the aviation safety and aerospace workforce.
Sec. 642. Scholarships for Service
This section directs NASA and the FAA to develop a joint
student loan program for full-time students enrolled in an
undergraduate or post-graduate program leading to an advanced
degree in an aerospace related field of endeavor, and allows
NASA and FAA to provide temporary internships to such students.
It authorizes such sum as necessary to NASA and FAA to carry
out this section in FY 2004, and requires a report to Congress
to advise whether this program should be extended with a budget
and plan for conducting the program. The Committee expects to
continue to review this section to best address ways to
encourage people to enter the aviation safety and aerospace
workforce.
SUBTITLE C--FAA RESEARCH, ENGINEERING, AND DEVELOPMENT
Sec. 661. Research Program To Improve Airfield Pavements
This section directs the FAA to continue the airfield
pavement research program by which grants, cooperative
agreements or other incentives may be provided to nonprofit
concrete and asphalt pavement research foundations that are
tasked with improving the safety and efficiency of runway
planning, building and repair.
Sec. 662. Ensuring Appropriate Standards for Airfield Pavements
This section requires the FAA Administrator to review and
determine whether FAA's standards regarding airfield pavements
meet current life-cycle requirements, and if not, FAA must
provide for the necessary adjustments to achieve these
standards. Within 1 year of passage of this legislation, the
FAA must report the results of this review to Congress.
Sec. 663. Assessment of Wake Turbulence Research and Development
Program
This section instructs the FAA to enter into an arrangement
with the National Research Council to assess the FAA's proposed
wake turbulence research and development program. It authorizes
$500,000 for FY 2004.
Sec. 664. Cabin Air Quality Research Program
This section provides the FAA the option of establishing a
research program to address issues regarding the cabin air
quality of passenger aircraft, including airborne diseases.
Sec. 665. International Role of the FAA
This section directs the FAA to bolster its role in
international aviation safety through working with their
foreign counterparts and the private sector to improve global
aviation safety.
Sec. 666. FAA Report on Other Nations' Safety and Technologies
Advancements
This section requires the FAA to issue a report on other
nations' safety and technological advancements and how these
advancements might be used in the United States.
Sec. 667. Development of Analytical Tools and Certification
This section directs the FAA to conduct research to improve
existing certification methods and to reduce the overall costs
for the certification of new aviation-related products.
Sec. 668. Pilot Program To Provide Incentives for Development of New
Technologies
This section permits the FAA to conduct a pilot program to
provide operating incentives to users of the national airspace
for the deployment of new technologies, including technologies
to facilitate expedited flight routing and sequencing of take-
offs and landings. It authorizes $500,000 for FY 2004.
Sec. 669. FAA Center for Excellence for Applied Research and Training
in the Use of Advanced Materials in Transport Aircraft
This section requires the FAA to develop a center for
excellence for applied research and training in the use of
advanced materials in transport aircraft to promote and
facilitate collaboration between FAA, academia, and industry.
It authorizes $500,000 for FY 2004.
Sec. 670. FAA Certification of Design Organization
This section directs the FAA to submit a plan to Congress for
the development of a system for certification of aircraft
design organizations and to implement that plan within 5 years
of the passage of the bill.
Sec. 671. Report on Long Term Environmental Improvements
This section requires the FAA, NASA, and the Office of
Aerospace and Aviation Liaison to submit a study on ways to
reduce aircraft noise and emissions and to increase aircraft
fuel efficiency within 1 year after passage of the bill. It
authorizes $500,000 for FY 2004.
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 Ensign offered an amendment, to the amendment (in the
nature of a substitute) offered by Senator McCain, to increase
the number of extraperimeter slots at Ronald Reagan Washington
National Airport. By rollcall vote of 11 yeas and 11 nays as
follows, the amendment was defeated:
YEAS--11 NAYS--11
Mr. Stevens\1\ Ms. Snowe\1\
Mr. Burns Mr. Fitzgerald\1\
Mr. Lott Mr. Allen
Mrs. Hutchison\1\ Mr. Hollings
Mr. Brownback\1\ Mr. Inouye\1\
Mr. Smith Mr. Rockefeller
Mr. Ensign Mr. Kerry\1\
Mr. Wyden Mr. Breaux\1\
Mrs. Boxer Mr. Dorgan
Ms. Cantwell Mr. Nelson
Mr. McCain Mr. Lautenberg
\1\By proxy
Senator Boxer offered an amendment, to the amendment (in the
nature of a substitute) offered by Senator McCain, to improve
the training requirements for and require the certification of
cabin crew members. By rollcall vote of 12 yeas and 10 nays as
follows, the amendment was adopted:
YEAS--12 NAYS--10
Mr. Smith Mr. Burns
Mr. Hollings Mr. Lott
Mr. Inouye\1\ Mrs. Hutchison
Mr. Rockefeller\1\ Ms. Snowe\1\
Mr. Kerry\1\ Mr. Brownback
Mr. Breaux\1\ Mr. Fitzgerald\1\
Mr. Dorgan\1\ Mr. Ensign
Mr. Wyden\1\ Mr. Allen
Mrs. Boxer Mr. Sununu
Mr. Nelson Mr. Lautenberg
Ms. Cantwell
Mr. McCain
\1\By proxy
Mr. Hollings made a motion to reconsider the vote by which
the Ensign amendment was defeated. By rollcall vote of 12 yeas
and 10 nays as follows, Mr. McCain voting present, the motion
carried:
YEAS--12 NAYS--10
Mr. Stevens\1\ Ms. Snowe\1\
Mr. Burns Mr. Fitzgerald\1\
Mr. Lott Mr. Allen
Mrs. Hutchison Mr. Inouye\1\
Mr. Brownback Mr. Rockefeller\1\
Mr. Smith Mr. Kerry\1\
Mr. Ensign Mr. Breaux\1\
Mr. Sununu Mr. Dorgan\1\
Mr. Hollings Mr. Nelson
Mr. Wyden\1\ Mr. Lautenberg
Mrs. Boxer
Ms. Cantwell
\1\By proxy
The Committee reconsidered the vote by which the Ensign
amendment was defeated. By rollcall vote of 12 yeas and 11 nays
as follows, the amendment was adopted:
YEAS--12 NAYS--11
Mr. Stevens\1\ Ms. Snowe\1\
Mr. Burns Mr. Fitzgerald\1\
Mr. Lott Mr. Allen
Mrs. Hutchison Mr. Hollings
Mr. Brownback Mr. Inouye\1\
Mr. Smith Mr. Rockefeller
Mr. Ensign Mr. Kerry\1\
Mr. Sununu Mr. Breaux\1\
Mr. Wyden\1\ Mr. Dorgan\1\
Mrs. Boxer\1\ Mr. Nelson
Ms. Cantwell Mr. Lautenberg
Mr. McCain
\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, in its opinion,
it is necessary to dispense with the requirements of that
paragraph in order to expedite the business of the Senate.