Airport Alert: House Democrats Unveil Coronavirus Relief Package - Proposal Includes $10 Billion for Airport
March 23, 2020
A day after Senate negotiations broke down over a third coronavirus relief package, House Speaker Nancy Pelosi (D-CA) unveiled her own proposal. Like the Senate package that was unveiled yesterday, the House Democratic proposal includes $10 billion for airports and new flexibility to allow them to use those funds for debt service and operational expenses.
Negotiations are continuing in the Senate; it is unclear how much attention will be paid to the House Democratic proposal. We will keep you posted on new developments.
Airport Provisions
Funding: Like the Senate proposal that was circulated yesterday, the House Democratic plan includes $10 billion for airports with revenue coming from the general fund.
It would also provide flexibility to allow airports to use the funds for "emergency response, cleaning, sanitation, janitorial services, staffing, workforce retention, paid leave, procurement of protective health equipment and training for employees and contractors, debt service payments, infrastructure projects and airport operations."
Similar to the Senate package, the House bill calls for 100 percent federal share. The no local match requirement would apply to funding in this bill as well as AIP funding that Congress already approved as part of the Fiscal Year 2020 appropriations process.
Distribution: The House Democratic plan would distribute the $10 billion somewhat differently than the Senate bill. The House proposal calls for the FAA to distribute funds initially based on entitlements then to distribute remaining funds based on enplanements.
- Initial Entitlement Run: The bill would require the FAA to begin distributing funds to airports based on entitlements. For that initial run, the bill calls for doubled entitlements for primary airports, and it would retain the $1 million minimum entitlement for primary airports. It would also eliminate the maximum apportionment and PFC turnbacks for large and medium hubs.
- Remaining Funds: After the set-asides described below and the initial entitlement run, the bill would require the FAA to distribute remaining funds 'based on each airport's passenger enplanements compared to total passenger enplanement for airports, for the most recent calendar year the Secretary apportioned funds….'
- 2 Percent for High-Need Airports: The bill would preserve 2 percent of the remaining funds for 'commercial service or general aviation air airports that demonstrate the highest financial need.'
- 2 Percent for Airport Concessions: The bill would require airports to use 2 percent of the remaining funds 'to provide financial relief to airport concessionaires experiencing economic hardship….'
Workforce Retention Requirements: Unlike the Senate proposal, the House plan proposes to include some strings for airports receiving federal assistance. The bill would require airports to employ at least 90 percent of their workers through the end of the year.
However, that requirement would not apply to non-hub or non-primary airports. The bill would also allow DOT to waive that workforce retention requirement if agency determines the airport is experiencing "economic hardship" or if the requirement would undermine aviation safety and security.
VALE Program: In addition to focusing on aviation workers, the House Democratic bill would take steps to mitigate climate change - a theme that the Democratic caucus has been highlighting during the infrastructure debate. The plan calls for expanding the FAA's Voluntary Airport Low Emissions program.
Small Community Air Service
Essential Air Service: The bill includes an additional $100 million for the Essential Air Service Program.
Continuation of Air Service: The bill would require DOT to "take appropriate action to ensure that all small communities that received commercial air service before March 1, continue to receive adequate air transportation service...."
Security Provisions
REAL ID: The bill would extend the REAL ID requirement until not earlier than September 30, 2021 - a year later than the current enforcement deadline.
Sanitation at Security Checkpoints: The bill includes $54 million for TSA to spend on "enhanced sanitation at airport security checkpoints."
Explosive Detection Trace Swabs: The plan also includes $20 million for one-time usage of explosive detection trace swabs to prevent cross-contamination.
Airline Provisions
Grants and Loans: The House Democratic plans includes a total of $61 billion for carriers and their employees. Of that amount, $37 billion would be for grants "to employees of mainline, regional, and cargo airlines" and another $3 billion in grants to "employees of ground support and catering contractors." The remaining $21 billion would go toward unsecured loans for air carriers. By contrast, the Senate bill includes $58 billion in loans and loan guarantees for the passenger and cargo carriers.
CEO Compensation/Stock Buybacks: The House Democratic plan would place limits on CEO compensation and temporarily ban stock buybacks.
Ancillary Fees: According to a Democratic summary, the bill would "ensure transparency of airline profits made from ancillary fees by requiring clear and separate reporting by carriers to the DOT of all carrier-imposed ancillary fees charges to passengers."
Cancellation Fees: The bill would also require airlines to provide refunds for change and cancellation fees during natural disasters or emergencies.
