Action Alert: House Expected to Clear Relief Package That Includes $8 Billion for "Airport Relief"
February 26, 2021
The House late tonight or early tomorrow morning is expected to clear the American Rescue Plan – a $1.9 trillion coronavirus relief package that includes $8 billion to help airports and concessionaires impacted by the pandemic.
Democrats are using the budget reconciliation process, which will allow them to approve the new spending by a simple majority in the Senate, where major legislation typically takes 60 votes to pass. Republicans have complained that the process is a partisan exercise unlike the regular order that lawmakers used to consider previous coronavirus relief bills.
After House passage, the bill will go to the Senate where Republicans may raise points of orders against provisions that violate the so-called "Byrd Rule," which prohibits the Senate from considering extraneous items as part of the budget reconciliation process. Yesterday, the Senate parliamentarian ruled that a proposal in the bill to raise the minimum wage to $15 per hour would violate Senate budget rules.
The Senate is expected to strip out or modify the minimum wage hike and possibly make other changes, forcing the House to consider the revised bill. Democratic leaders hope to have the package through the House and Senate and to the President by March 14, before current enhanced unemployment insurance benefits are set to expire.
Aviation Provisions
Airport Funding: The bill includes $8 billion to help airports and concessionaires "prevent, prepare for, and respond to coronavirus."
Primary Airports: Of the $8 billion included in the bill, $6.492 billion would be reserved for primary airports and certain cargo airports to use for "costs related to operations, personnel, cleaning, sanitization, janitorial services, combating the spread of pathogens at the airport, and debt service payments." The federal share would be 100 percent.
Funds would be distributed based on a modified AIP apportionment run – as was the case with the airport funding included in the December relief package. The cargo set-aside would remain intact, and there would be no maximum grant amount or PFC turnback. It would preserve doubled entitlements and retain the $1 million minimum entitlement for smaller primary airports. Any remaining funds would be distributed based on enplanements.
Non-Primary Commercial Service/General Aviation Airports: The bill includes $100 million for nonprimary commercial service and general aviation airports with a 100 percent federal share.
Concessionaries: The measure also provides primary airports $800 million "to provide relief from rents and minimum annual guarantees to airport concessions." Of that amount, $640 million would be reserved for "small" airport concessions and $160 million for "large" airport concessions.
An eligible small airport concession is defined as a concession that is "in-terminal" and is a small business with a three-year average of less than $56.42 million in maximum gross receipts or is a joint venture. An eligible large airport concession is defined as a concession that is "in-terminal" and has a three-year average of more than $56.42 million in maximum gross receipts.
The measure calls for airports to "provide relief from rent and minimum annual guarantee obligations to each eligible airport concession in an amount that reflects each eligible airport concession's proportional share of the total amount of the rent and minimum annual guarantees of all those eligible airport concessions at such airport."
Federal Share for AIP Grants: The bill includes $608 million to pay "a Federal share of 100 percent of the costs for any grant awarded in fiscal year 2021, or in fiscal year 2020 with less than 100 percent federal share…."
Eligibility: Any airport that received more than four years of operating expenses under the CARES Act would be ineligible for these funds.
Workforce Retention: In an effort to get around the Senate's Byrd Rule, the House-passed bill includes slightly revised workforce retention language. The bill states that "as a condition of receiving funds" an airport "shall continue to employ, through September 30, 2021, at least 90 percent of the number of individuals employed (after making adjustments for retirements or voluntary employee separations) by the airport as of March 27, 2020."
The Secretary of Transportation may waive the workforce retention requirement if the Secretary determines that the airport is "experiencing economic hardship as a direct result of the requirement, or the requirement reduces aviation safety or security." As has been the case with previous relief measures, the workforce retention requirement does not apply to nonhub or nonprimary airports.
The revised provision also includes new language that says any airport that fails to comply with the workforce retention requirement and does not otherwise qualify for a waiver or exception "shall be subject to clawback by the Secretary."
Payroll Support Program: The American Rescue Plan would extend the Payroll Support Program for the airline industry. Specifically, the bill includes $14 billion to extend the PSP through September 30 for airline workers and another $1 billion for contractors.
