Airport Alert: House Democrats Unveil Infrastructure Package; Measure Would Authorize Billions of Dollars for Airports
June 22, 2020
Days after the House Transportation and Infrastructure Committee approved a 5-year surface transportation bill, House Democrats this morning unveiled a broader $1.5 trillion infrastructure package that would authorize increased AIP funding to $4 billion annually and provide up to $4 billion annually in supplemental funding to help airports pay for their COVID-19-related expenses and capital needs.
As we mentioned last week, House Democrats are including the committee-passed surface transportation bill into a broader infrastructure package known as H.R. 2, the Moving America Forward Act. According to a summary, the package includes funding for traditional infrastructure such as "highways, bridges, rail, airports, ports/harbors." It also calls for investing in schools, housing, broadband, drinking and wastewater and includes other initiatives.
Democratic leaders are moving quickly on their infrastructure initiative. They intend to bring the bill to the House floor next week and finish before July 4. According to a "Dear Colleague" posted on the House Rules Committee this morning, the Committee is planning to meet week to consider the amendment process for floor consideration of the bill. The Rules Committee is asking lawmakers to submit their proposed amendments by 10:00 a.m. on Thursday, June 25.
Airport Funding
Overall Airport Funding: The infrastructure package would authorize an influx of funding that would help airports build critical infrastructure projects and pay for some of their COVID-19-related expenses. The bill would authorize a total of $37.5 billion for airports through FY25, including $20 billion for the traditional AIP program.
It authorizes $17.5 billion in supplemental funding for terminal projects and other infrastructure projects through FY25. And it includes broader eligibility in FY21 to help airports with COVID-19-related expenses such as cleaning, sanitization, debt service, and to provide financial relief to concessionaires.
AIP Funding: The bill would increase the annual authorization level for the traditional AIP program from $3.35 billion to $4 billion through FY25 - an increase of $650 million annually over the current authorization level. Overall, the bill would authorize $20 billion in traditional AIP funding over the next five years or about $10 billion more for AIP than is authorized for the program through FY23 - the last year of the FAA reauthorization bill that Congress passed in 2018.
Maintaining AIP Apportionments: The bill would ensure commercial service airports receive higher AIP apportionments based on enplanements in a typical calendar year instead of relying on lower enplanement levels due the coronavirus. Specifically, the bill calls for AIP funds for commercial service airports in FY21 through FY25 to be distributed based on enplanements for calendar year 2019 "if the number of passenger boardings at the airport during calendar year 2019 is greater than the number of passenger boardings that would be otherwise calculated...."
Supplemental Funding: The bill would also authorize up to $4 billion in supplemental funding for airports through FY25 with funding coming from the general fund rather than the Airport and Airway Trust Fund. Specifically, the measure would authorize $3 billion in supplemental funding in FY21 and increase annual funding by $250 million every year to $4 billion by FY25.
Distribution: Supplemental funds for commercial service airports would be distributed based on enplanements for calendar year 2019 or the most recent calendar year, whichever is greater. The bill would prohibit any airport that received more than four times its annual operating expenses in the CARES Act from receiving supplemental funding in FY21 or FY22.
Set Asides: Supplemental funds would include the following set asides:
• 3.5 percent for cargo airports;
• 4 percent for general aviation, reliever and nonprimary commercial service airports; and
• 4.5 percent for environmental projects including: airport emission reduction projects; airport resiliency projects; airport noise and mitigation planning, programs and projects; and other airport projects that "reduce the adverse effects of airport operations on the environment and surrounding communities...."
Eligibility in FY21: The bill would allow airports to use the supplemental funding in FY21 for "terminal development projects, operations, ensuring public health, cleaning, sanitization, janitorial services, refurbishing or replacing systems and technologies to combat the spread of pathogens, staffing, workforce retention, paid leave, procurement of protective health equipment and training for employees and contractors on use of such equipment, debt service payments and rent and fee waivers to airport concessions and other lessees."
Eligibility in FY22 through FY25: The bill would allow airports to use supplemental funding in FY22 through FY25 for AIP-eligible projects, PFC-eligible projects (including terminal development projects), any development project "directly or substantially related to the transportation of passengers or property, and debt service or other financing costs related to such projects."
Federal Share: The bill calls for supplemental airport funding to include a 100 percent federal share.
Administrative Costs: The bill would preserve $8 million annually for the FAA to distribute the supplemental grants.
Airport Resiliency Projects: The bill would make resiliency projects at commercial service airports AIP-eligible. Specifically, the bill would expand AIP eligibility to include the "improvement of any critical airport infrastructure at a nonhub, small hub, medium hub or large hub airport to increase resilience for the purpose of resuming flight operations under visual flight rules following a natural disaster."
Other Environmental Provisions
Alternative Fuel and Low Emission Aviation Technology Program: The bill would require DOT and EPA to create a competitive grant program to 1) develop low-emission aviation technologies; and 2) to produce, transport, blend or store sustainable aviation fuels that would reduce greenhouse gas emissions. The bill would authorize $200 million annually for the Alternative Fuel and Low Emission Aviation Technology Program with funding split equally between the development of low emission aviation technologies and the production of sustainable aviation fuels.
VALE Program: The bill would expand the Voluntary Airport Low Emission Program by allowing airports outside of air quality nonattainment areas to use AIP funds and PFC revenue for eligible projects. Currently, VALE funding is "available to commercial service airports located in areas that are in nonattainment or maintenance of National Ambient Air Quality Standards." Despite the proposed expansion, the would require DOT to prioritize Federal funding for airports in air quality nonattainment areas.
Sustainable Aviation Fuel: The bill would authorize $30 million annually through FY25 for the "study and development of sustainable jet fuel."
Alternative Jet Fuel: The bill would authorize $5 million annually through FY25 for work performed by the Centers of Excellence for Alternative Jet Fuels and Environment. Programs include those that "assess and reduce the environmental impacts of aviation and to improve the health and quality of life of individuals living in and around airport communities."
Climate Change: The bill calls for DOT to enter an agreement with the National Academies of Sciences, Engineering, and Medicine to "conduct a study on climate change mitigation efforts with respect to civil aviation and aerospace industries." The bill authorizes $1.5 million for the study.
Miscellaneous
Bond Provisions: The bill would spur "private investment through the tax code by permanently reinstating Build America Bonds and Advance Refunding Bonds, and increasing and expanding the issuance of Private Activity Bonds."
The Tax Cut and Jobs Act, which Congress passed in late 2017, repealed advance refunding bonds despite objections from airports. Doing away with advance refundings was expected to increase federal revenues by approximately $17 million over ten years, and Republican lawmakers needed ways to help pay for the $1 trillion "tax" package.
Innovative Financing/Small Airport LOIs: The bill includes a proposal from Rep. Lloyd Smucker (R-PA) that would allow DOT to approve applications at up to 30 airports to use innovative financing techniques to help lower costs and expedite airport infrastructure projects. His proposal, which the Transportation and Infrastructure Committee approved last week, would also expand Letters of Intent to small airports.
Air Traffic Control Facilities: The bill authorizes $1 billion from the general fund "to bring air traffic control facilities of the Administration into acceptable condition, including sustaining, rehabilitating, replacing, or modernizing such facilities and associated costs."
Related Information
• A fact sheet of the bill may be viewed here.
• A section-by-section summary of the bill may be viewed here.
• The bill text may be viewed here.
As we mentioned last week, House Democrats are including the committee-passed surface transportation bill into a broader infrastructure package known as H.R. 2, the Moving America Forward Act. According to a summary, the package includes funding for traditional infrastructure such as "highways, bridges, rail, airports, ports/harbors." It also calls for investing in schools, housing, broadband, drinking and wastewater and includes other initiatives.
Democratic leaders are moving quickly on their infrastructure initiative. They intend to bring the bill to the House floor next week and finish before July 4. According to a "Dear Colleague" posted on the House Rules Committee this morning, the Committee is planning to meet week to consider the amendment process for floor consideration of the bill. The Rules Committee is asking lawmakers to submit their proposed amendments by 10:00 a.m. on Thursday, June 25.
Airport Funding
Overall Airport Funding: The infrastructure package would authorize an influx of funding that would help airports build critical infrastructure projects and pay for some of their COVID-19-related expenses. The bill would authorize a total of $37.5 billion for airports through FY25, including $20 billion for the traditional AIP program.
It authorizes $17.5 billion in supplemental funding for terminal projects and other infrastructure projects through FY25. And it includes broader eligibility in FY21 to help airports with COVID-19-related expenses such as cleaning, sanitization, debt service, and to provide financial relief to concessionaires.
AIP Funding: The bill would increase the annual authorization level for the traditional AIP program from $3.35 billion to $4 billion through FY25 - an increase of $650 million annually over the current authorization level. Overall, the bill would authorize $20 billion in traditional AIP funding over the next five years or about $10 billion more for AIP than is authorized for the program through FY23 - the last year of the FAA reauthorization bill that Congress passed in 2018.
Maintaining AIP Apportionments: The bill would ensure commercial service airports receive higher AIP apportionments based on enplanements in a typical calendar year instead of relying on lower enplanement levels due the coronavirus. Specifically, the bill calls for AIP funds for commercial service airports in FY21 through FY25 to be distributed based on enplanements for calendar year 2019 "if the number of passenger boardings at the airport during calendar year 2019 is greater than the number of passenger boardings that would be otherwise calculated...."
Supplemental Funding: The bill would also authorize up to $4 billion in supplemental funding for airports through FY25 with funding coming from the general fund rather than the Airport and Airway Trust Fund. Specifically, the measure would authorize $3 billion in supplemental funding in FY21 and increase annual funding by $250 million every year to $4 billion by FY25.
Distribution: Supplemental funds for commercial service airports would be distributed based on enplanements for calendar year 2019 or the most recent calendar year, whichever is greater. The bill would prohibit any airport that received more than four times its annual operating expenses in the CARES Act from receiving supplemental funding in FY21 or FY22.
Set Asides: Supplemental funds would include the following set asides:
• 3.5 percent for cargo airports;
• 4 percent for general aviation, reliever and nonprimary commercial service airports; and
• 4.5 percent for environmental projects including: airport emission reduction projects; airport resiliency projects; airport noise and mitigation planning, programs and projects; and other airport projects that "reduce the adverse effects of airport operations on the environment and surrounding communities...."
Eligibility in FY21: The bill would allow airports to use the supplemental funding in FY21 for "terminal development projects, operations, ensuring public health, cleaning, sanitization, janitorial services, refurbishing or replacing systems and technologies to combat the spread of pathogens, staffing, workforce retention, paid leave, procurement of protective health equipment and training for employees and contractors on use of such equipment, debt service payments and rent and fee waivers to airport concessions and other lessees."
Eligibility in FY22 through FY25: The bill would allow airports to use supplemental funding in FY22 through FY25 for AIP-eligible projects, PFC-eligible projects (including terminal development projects), any development project "directly or substantially related to the transportation of passengers or property, and debt service or other financing costs related to such projects."
Federal Share: The bill calls for supplemental airport funding to include a 100 percent federal share.
Administrative Costs: The bill would preserve $8 million annually for the FAA to distribute the supplemental grants.
Airport Resiliency Projects: The bill would make resiliency projects at commercial service airports AIP-eligible. Specifically, the bill would expand AIP eligibility to include the "improvement of any critical airport infrastructure at a nonhub, small hub, medium hub or large hub airport to increase resilience for the purpose of resuming flight operations under visual flight rules following a natural disaster."
Other Environmental Provisions
Alternative Fuel and Low Emission Aviation Technology Program: The bill would require DOT and EPA to create a competitive grant program to 1) develop low-emission aviation technologies; and 2) to produce, transport, blend or store sustainable aviation fuels that would reduce greenhouse gas emissions. The bill would authorize $200 million annually for the Alternative Fuel and Low Emission Aviation Technology Program with funding split equally between the development of low emission aviation technologies and the production of sustainable aviation fuels.
VALE Program: The bill would expand the Voluntary Airport Low Emission Program by allowing airports outside of air quality nonattainment areas to use AIP funds and PFC revenue for eligible projects. Currently, VALE funding is "available to commercial service airports located in areas that are in nonattainment or maintenance of National Ambient Air Quality Standards." Despite the proposed expansion, the would require DOT to prioritize Federal funding for airports in air quality nonattainment areas.
Sustainable Aviation Fuel: The bill would authorize $30 million annually through FY25 for the "study and development of sustainable jet fuel."
Alternative Jet Fuel: The bill would authorize $5 million annually through FY25 for work performed by the Centers of Excellence for Alternative Jet Fuels and Environment. Programs include those that "assess and reduce the environmental impacts of aviation and to improve the health and quality of life of individuals living in and around airport communities."
Climate Change: The bill calls for DOT to enter an agreement with the National Academies of Sciences, Engineering, and Medicine to "conduct a study on climate change mitigation efforts with respect to civil aviation and aerospace industries." The bill authorizes $1.5 million for the study.
Miscellaneous
Bond Provisions: The bill would spur "private investment through the tax code by permanently reinstating Build America Bonds and Advance Refunding Bonds, and increasing and expanding the issuance of Private Activity Bonds."
The Tax Cut and Jobs Act, which Congress passed in late 2017, repealed advance refunding bonds despite objections from airports. Doing away with advance refundings was expected to increase federal revenues by approximately $17 million over ten years, and Republican lawmakers needed ways to help pay for the $1 trillion "tax" package.
Innovative Financing/Small Airport LOIs: The bill includes a proposal from Rep. Lloyd Smucker (R-PA) that would allow DOT to approve applications at up to 30 airports to use innovative financing techniques to help lower costs and expedite airport infrastructure projects. His proposal, which the Transportation and Infrastructure Committee approved last week, would also expand Letters of Intent to small airports.
Air Traffic Control Facilities: The bill authorizes $1 billion from the general fund "to bring air traffic control facilities of the Administration into acceptable condition, including sustaining, rehabilitating, replacing, or modernizing such facilities and associated costs."
Related Information
• A fact sheet of the bill may be viewed here.
• A section-by-section summary of the bill may be viewed here.
• The bill text may be viewed here.
