WASHINGTON INSIGHT

AIR-21 rewrite taking off

Jim Fahey
Director of Government Relations
APWA Washington Office

As the airlines, their employees, airport managers and airline passengers confront a difficult and uncertain period, timing for the anticipated rewrite of the federal aviation law could not come at a more critical moment. Due to expire at the end of September, the $40-billion, Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, better know as AIR-21, is up for reauthorization, and Congress and the Administration are wasting no time readying the next multi-year bill, a law that will set future regulatory policy and funding for everything from local airport construction to rural air service.

The debate is crystallizing around several major issues: the level of total funding, user fees and excise taxes, air service for rural communities and cost control measures for the Federal Aviation Administration (FAA). Because of a busy public works and infrastructure agenda this year, prospects for completing the legislation by the end of September remain uncertain, but lawmakers appear increasingly determined at this point to finish work on a new bill before AIR-21 expires, rather than push it into 2004, as some lawmakers had suggested earlier in the year.

The fact that reauthorization proposals began to emerge early this spring underscores that determination. The Bush Administration presented its plan in March and leaders of the Senate Commerce Committee introduced legislation in early April with plans to mark it up in May.

House Transportation and Infrastructure Committee leaders planned a markup of their bill in May as well. Details of the House bill were unavailable at the writing of this article, but House Aviation Subcommittee chairman John Mica (R-FL) said his priorities include increasing funding for the Airport Improvement Program (AIP), streamlining project delivery, funding security needs and expanding air service to small communities. AIP provides construction funding grants for local airport improvements.

Flight-100
The Bush Administration's four-year bill, the Centennial of Flight Aviation Authority Act (Flight-100), proposes no changes to the existing tax structure which funds aviation programs, and it maintains AIP funding at its current level of $3.4 billion annually.

Flight-100, however, restructures AIP formulas and set-asides to allow funds to be targeted to airports with the greatest need and dependence on federal assistance. Such restructuring would transfer more than $87 million in fiscal year 2004 funds from large to small airports, thereby raising small airports' share from approximately 63 percent to over 66 percent of total AIP grants. The Administration's proposal also increases the amount of discretionary funding from 34 percent to 46 percent of the AIP program, allowing FAA to target those projects that serve national objectives and achieve the greatest system benefits regardless of airport size.

Flight-100 would implement major revisions to the Essential Air Service (EAS) Program. It would create an Essential Transportation Service (ETS) Program to provide more efficient management and to better tailor the service to the needs of specific communities. The proposal requires communities to contribute either 10 percent or 25 percent of the total subsidy required, depending on their degree of isolation.

Finally, the proposal provides $2.9 billion in 2004 for FAA facilities and equipment, rising to $3.1 billion by 2007. FAA would receive $7.5 billion in fiscal year 2004 for operations and maintenance, a seven percent increase over the fiscal year 2003 budget request. The proposal also includes $100 million for safety research, engineering and development in fiscal year 2004.

AIR-Vision
The Investment and Revitalization Vision Act (AIR-Vision) was introduced by Commerce Committee Chairman Sen. John McCain (R-AZ) and cosponsored by ranking member Sen. Ernest Hollings (D-SC), Aviation Subcommittee Chairman Sen. Trent Lott (R-MS) and ranking member Sen. John Rockefeller (D-WV).

AIR-Vision (S.824) is a three-year authorization. It provides $10.5 billion for AIP, starting at $3.4 billion in 2004 and reaching $3.6 billion by 2006. Under the plan, FAA operations funding grows from $7.6 billion in 2004 to $7.9 billion by 2006. In addition, the bill authorizes over $800 million for research, engineering and development.

AIR-Vision includes provisions for streamlining the process for approving and constructing airport capacity improvements and contains a mechanism for funding costs to implement security at airports. The bill continues funding the EAS program at $113 million annually and extends the Small Community Air Service Development Pilot Program, enacted under AIR-21, which is designed to assist certain small communities in enhancing air service.

Next Steps
Once the House and Senate pass their bills, a conference committee will be formed to reconcile differences before any legislation reaches the President's desk. An extension of AIR-21 is likely if new legislation is not enacted by September 30.

Jim Fahey can be reached at (202) 408-9541 or by e-mail at jfahey@apwa.net.