Airport Alert: Lawmakers Reach Agreement on Final FAA Bill. Measure Calls for Increasing AIP to $4 Billion Annually
Lawmakers Reach Agreement on Final FAA Bill
Measure Calls for Increasing AIP to $4 Billion Annually
April 29, 2024
After months of delay, House and Senate transportation committee leaders early this morning unveiled a bipartisan and bicameral FAA reauthorization bill that would increase AIP funding to $4 billion annually, authorize $350 million to help airports transition to fluorine-free firefighting foam, and usher in a long list of policy changes to help airports of all sizes. The long-awaited agreement comes as the current short-term extension in set to expire on May 10.
Key Wins for Airports: In addition to increasing the AIP authorization level, the final FAA bill authorizes $200 million annually for discretionary airport grants that focus on resilience and runway safety projects. The measure also provides some much-needed regulatory relief by streamlining the PFC application process and fixing language in the previous FAA bill to give airports more autonomy over non-aeronautical land. Here are some of the highlights of the agreement:
• Authorizes $4 billion annually for AIP;
• Authorizes $200 million annually for discretionary airport grants that focus on resilience and runway safety projects;
• Authorizes $350 million for a new PFAS replacement program;
• Streamlines the PFC application process;
• Fixes Section 163 from the last FAA bill;
• Take steps to improve staffing and equipment at contract towers; and
• Authorizes $20 million annually for three workforce development programs.
Beating Back Controversial Proposals: We have good news to report on the security front, too. The bill does not include a controversial proposal from Senate Commerce Committee Ranking Member Ted Cruz (R-TX) that would require TSA and ultimately airports to provide security escorts to lawmakers and other federal officials along with their family members and staff. AAAE and ACI-NA urged lawmakers to reject the proposal that TSA estimated could cost up to $500 million annually. A letter that AAAE President and CEO Todd Hauplti sent to key lawmakers that outlines our objections to the Cruz initiative may be viewed here.
The final bill also excludes a proposal from Senators Jeff Merkley (D-OR) and John Kennedy (R-LA) that would prohibit or severely restrict the TSA from using biometric facial matching technologies at security checkpoints. AAAE, A4A, and other aviation stakeholders urged lawmakers to reject the Merkley-Kennedy proposal because it would reduce aviation security and create longer lines at security checkpoints. A letter that AAAE’s Todd Hauptli sent to lawmakers expressing our opposition to the proposal may be viewed here.
As expected, the FAA reauthorization bill excludes the so-called “Good Jobs for Good Airport Act.” The labor-backed bill, which AAAE and ACI-NA urged lawmakers to reject early in the FAA reauthorization process, would have required airlines and concessionaires to pay their service workers at least $15 per hour and provide those same workers with certain benefits. It was not included in House-passed bill or the Senate Commerce Committee-approved bill.
Status of Other Contentious Issues: Committee leaders resolved their differences over a handful controversial issues that slowed progress on the bill for months. Lawmakers excluded a House-passed provision to raise the mandatory retirement age for commercial airline pilots from 65 to 67. But they did adopt compromise language on the 1,500-hour training rule that was in the Senate Commerce Committee-passed bill.
The final bill will add five additional round trips at Ronald Reagan Washington National Airport within and beyond the 1,250-mile perimeter. Senators from the Washington, DC area worked to preserve the status quo and highlighted the recent near miss at DCA to help make their case against expansion, but lawmakers agreed to stick with the additional slots contained in the Senate version of the bill.
Next Steps: The Senate is expected to take up the final FAA bill early this week. We expect lawmakers will file germane and non-germane amendments on a variety of topics since this is likely to be one of the last major bills to be enacted into law before the upcoming elections. It is possible that Senators Merkley and Kennedy could file an amendment to prohibit or severely restrict the TSA from using biometric facial matching technologies.
After the Senate clears the bill, the measure will go to the House where we expect leaders on the other side of the Capitol will consider the measure under suspension of the rules – a procedural move that will expedite final passage by making amendments not in order. Leaders in both chambers are trying to get the bill to the president quickly so he can sign it into law before the May 10 deadline.
Airport Infrastructure Funding
AIP Funding: The final FAA bill would increase annual AIP authorization from $3.35 billion to $4 billion through FY28 – a top airport priority. This funding increase would augment the $20 billion that congress approved for airport capital projects as part of the Bipartisan Infrastructure Law.
Discretionary Airport Grants: The agreement “eliminates the AIP supplemental program and replaces it with a discretionary airport grant program that funds airport resilience and runway safety projects.” The House-passed bill included $100 million annually for broader supplemental discretionary grants, and the Senate version of the bill did not contain any funding for that purpose.
Airport Improvement Program Modifications
Turnback Reduction: Under current law, large and medium hubs that impose a PFC above $3 are required to “turnback” 75 percent of their AIP entitlements. Like the House-passed bill, the final legislation bill would reduce that turnback to 60 percent to help larger airports pay for their infrastructure projects.
Minimum Entitlement: Under the current AIP formula, the minimum entitlement for commercial service airports with more than 10,000 enplanements is $1 million when Congress appropriates at least $3.2 billion for AIP. Like the House-passed bill, the final legislation bill would increase that amount to $1.3 million.
AIP Formula Changes: Like the House-passed bill, the final FAA bill would create a “sliding scale” of entitlements for commercial service airports to avoid the big discrepancies among the various categories. According to the latest summary, “commercial service airports will receive funding on a sliding scale that ramps up from the $150,000 non-primary entitlement to the $1.3 million minimum primary apportionment, depending on the number of enplaned passengers.”
Terminal Development: The agreement would also increase the cap on the cumulative amount of discretionary funds that non-hub and certain small hub airports can use for terminal projects from $20 million to $30 million under certain circumstances. AAAE and ACI-NA urged Congress to eliminate the cap.
Local Match: The final bill would reduce the local match for nonhub and nonprimary airports from 10 percent to 5 percent through FY26.
Increased GA Funding and Small Airport Letter of Intent: The final bill includes a House-passed provision that would increase the amount available for nonprimary commercial service, general aviation, and reliever airports from 20 percent to 25 percent of the total amount available for AIP grants. It would also allow DOT to create a new “small airport letters of intent” program.
Cargo Entitlement: Under the current AIP formula, 3.5 percent of the total amount available for AIP grants is set aside for cargo service airports. The final bill would increase that amount to 4 percent.
Alternative Project Delivery: The bill “expands an existing alternative project delivery program and allows for the FAA to approve AIP funds for use in such projects.” It would also require FAA to establish a pilot program that would allow the agency to award grants for integrated project delivery contracts to carry out up to five building construction projects airports.
Avgas: The bill requires airports that “offered 100-octane low lead aviation gasoline for sale in 2022 to continue offering such gasoline for sale until the earlier of 2030 or the date on which a FAA-certified unleaded aviation gasoline alternative can be made available for purchase or use by general aviation aircraft operators at airports subject to certain conditions. Any airport violating this grant assurances will be assessed a civil penalty of not more than $5,000 per day the airport fails to comply with the grant assurance.”
AIP Handbook Update: The measure “requires the FAA to update the AIP handbook to account for legislative changes to the program, and for the unique circumstances in Alaska.” It also requires that the agency “release a draft handbook for public comment.”
Passenger Facility Charges/Regulatory Streamlining
PFC Streamlining: During consideration of the last FAA bill, Congress expanded PFC streamlining to include small, medium, and large hubs. However, the FAA only applied the expedited procedures to a narrow range of projects. The new FAA bill would require DOT to prescribe regulations to streamline the PFC application process. And it would prohibit the agency from objecting to PFC projects that airports had already received federal funds for the same project.
However, the final bill would leave in place the costly and time-consuming process for some PFC applications. After the last FAA reauthorization bill, the FAA established a list of criteria that made certain projects ineligible for the streamlined application process. The final bill would codify those exemptions and allow the agency to continue to prevent airports from using the streamlined application process for certain projects.
Broader PFC Eligibility: The House-passed bill included a provision that would have expanded eligibility by removing the limitation that requires airports to use PFCs for projects that preserve or enhance capacity, safety, or security; reduce noise; and enhance competition. However, it doesn’t appear that the provision is in the final bill.
Noise Barriers: The final bill includes a Senate provision that would allow small hub airports where the day-night sound level is expected to exceed 55 decibels or greater to use PFCs for noise barriers.
Section 163: The last FAA reauthorization bill included a provision designed to give airports more control over non-aeronautical land that they purchased without federal funds. Airports argue that the FAA has mishandled the implementation of that provision and created more unnecessary red tape. The final bill seeks to address those concerns by limiting the agency’s involvement except to ensure the safe and efficient operation of aircraft and safety of people.
Environmental
PFAS Replacement Program for Airports: The final bill contains a Senate proposal that authorizes up to $350 million for a PFAS replacement program. It also requires DOT to reserve up to $30 million of that amount to make grants available “to each eligible airport that is designated under part 139 as an Index A airport and does not have existing capabilities to produce fluorine-free foam,” to replace ARFF vehicles.
Categorical Exclusion: The final bill would increase the number of FAA activities that are presumed to be covered by categorical exclusions for purposes of the National Environmental Policy Act. For instance, the legislation creates a CATEX “for airport projects that receive less than $6 million in federal funding and or the rebuilding of airport infrastructure that is damaged or destroyed in a natural disaster.
VALE Program: The bill would expand the VALE program to all commercial service airports including those in non-attainment areas as AAAE and ACI-NA recommended.
Contract Tower Program
Controller Training: Airports have been urging Congress to take steps to address the shortage of air traffic controllers, in part, by allowing contractors to train controllers themselves. The final bill would require the Department of Transportation Inspector General to “conduct an audit of the workforce needs for the FAA Contract Tower Program.”
It also requires the audit to “review contract tower staffing levels and examine efforts to establish an air traffic controller training program or curriculum for initial technical and on-the-job training for these controllers, among other considerations.” Finally, the agreement “requires the DOT IG to submit a report on the results of the audit to Congress, and further requires the FAA to implement any relevant recommendations.”
Department of Labor Wage Determination: We urged Congress to include language in the bill that would require the FAA to work with the Department of Labor to review and update the outdated wage determination for controller show serve at contract towers. The final bill would require DOT to request that DOL review and update, if necessary, the wage determination for contract tower controllers. It also calls for a new wage determination for managers at contract towers.
Radar Displays: We have been urging Congress to allow contract tower controllers to use technology to improve situational awareness and provide dedicated funding for radar displays, ADS-B, and other equipment upgrades at contract towers. The final bill would allow contract tower controllers at to use a Standard Terminal Automation Replacement System (STARS), ADS-B, and other equipment to increase situational awareness for controllers. It would also require the FAA to partner with contractors on the appropriate initial training.
Application Process: The FAA’s AIP funding process, backlogs in siting studies, and other factors have created a much longer development timeline for some airports. We have been urging Congress to require the FAA to extend the 5-year period between the b/c candidacy notification and ATCT acceptance. The final would extend the timeline to seven years as we recommended.
Liability Insurance: Liability insurance for the FCT program is currently capped at $20 million. The agreement would require DOT to “consult with aviation industry experts to determine adequate limits of liability for the Contract Tower Program.” The section-by-section summary goes on to say that “until the DOT makes these determinations, the DOT must require air traffic control tower contractors to have adequate excess liability insurance to ensure continuity of coverage should a major accident occur.
Transition to FAA-Staffed Towers: The bill directs the FAA “to establish a pilot program to convert high activity air traffic control towers operating under the Contract Tower Program to FAA staffed visual flight rules towers.” As part of that requirement, the agency “must prioritize contract towers that had over 200,000 annual tower operations in calendar year 2022, served a small hub airport with more than 900,000 passenger enplanements in calendar year 2021, are currently FAA-owned or constructed to FAA standards, or operate within complex airspace.” The number of towers selected for the pilot program would be based on available funding and interest from airport sponsors.
Remote Towers: The final bill requires the FAA “to create a program and publish milestones for the system design and operational approval of a remote tower system.” And it would give priority consideration for those airports that: 1) do not have an air traffic control tower; 2) provide small and rural community air service; and 3) participate in the Contract Tower Program.
Small Community Air Service/Workforce
Essential Air Service Funding: The Senate bill would increase funding for the Essential Air Service Program from $340 million in FY25 to $350 million in FY28. By contrast, the House bill proposed to reduce EAS funding to $252 million in FY28.
Essential Air Service Reforms: The final bill includes several EAS reforms. The measure reduces the maximum overall per passenger subsidy cap of the program from $1,000 to $850 starting in FY27. It also “sets the per passenger subsidy cap at $650 for communities that are less than 175 miles from a medium or large hub airport.” But it does not appear to include a House-passed proposal that would apply a 5 percent cost share beginning in FY27.
Small Community Air Service Development Program: The Senate bill would increase funding for the Small Community Air Service Development program from $10 million to $15 million. That is $5 million more than the House version of the bill, but $5 million less than the Senate bill.
Aviation Workforce Development Programs: The last FAA reauthorization bill authorized $5 million annually for two programs to support the education of future aircraft pilots and aviation maintenance technical workers. The new FAA bill would increase funding for each program to $20 million each through FY28. It would also authorize same amount for “aviation manufacturing technical workers.”
Small Community Air Service Study: The bill “directs DOT to enter into an agreement with the National Academies to examine the loss of commercial air service in small communities in the United States and options to restore such service.”
Pilot Shortage Study: The bill includes a provision that would require GAO “to conduct a study to identify the extent and effects of the commercial aviation pilot shortage on regional/commuter air carriers.”
Airport Service Workforce Study: The bill also requires the GAO to conduct “a review of the domestic airport service workforce and examine the role and importance of this workforce to the aviation economy.” It also states that “DOT may convene a public working group of relevant entities, Federal agencies, and stakeholders to evaluate and discuss the report’s findings.
Miscellaneous/Labor Initiatives
ARFF: The final bill “requires the FAA to update part 139 airport regulations to require that small, medium, and large hub airports have an emergency medical technician.” It also requires the agency “to conduct a review of firefighter and rescue staffing levels at airports.”
Good Jobs for Good Airports Act: The final bill does not include a labor-backed bill that would have required airlines and concessionaires to pay their service workers at least $15 per hour and provide those same workers with certain benefits. An initial version of the bill called for conditioning AIP, PFC, and BIL funding on the ability of an airport to ensure that airlines and concessionaires provide service workers with certain, prescribed wage rates and benefits.
After strong objections from AAAE and ACI-NA, SEIU and their allies on the Hill agreed to eliminate proposals that threaten airport funding and will instead focus directly on airlines, concessionaries, and those who employ airport service workers. Despite the modifications, airports continued to have concerns about the modified proposal and its impact on airport partners and their operating costs, which could impact airport services and air service.
More Information
• Bill text may be viewed here.
• A section-by-section summary may be viewed here.
• The Senate Commerce/House Transportation and Infrastructure press release may be viewed here.
