Airport Alert: Senate Passes Bipartisan Infrastructure Bill; Uncertainty Remains in the House

August 10, 2021

After months of meticulous negotiations between a bipartisan group of senators and the White House, this morning, the Senate passed the five-year, $1.2 trillion bipartisan infrastructure bill (BIB) by a vote of 69-30. It now heads back to the House, where it faces a slew of uncertainty.

Airport/Aviation Funding Provisions in the Bipartisan Infrastructure Bill

Overall Funding:

$25 billion in general fund expenditures for aviation over 5 years

$15 billion for airport infrastructure grants (distributed by formula w/local match requirements)

$5 billion for a new "airport terminal program" (distributed by DOT, competitive grants w/local match requirements)

$5 billion for FAA Facilities and Equipment

Airport Infrastructure Grants: $15 billion/$3 billion annually FYs 2022 through 2026

Primary Airports:

$12.4 billion/$2.48 billion annually for primary commercial service airports.

Project Eligibility: Unlike the regular AIP program, airports would be allowed to use these federal funds for terminals and other PFC-eligible projects except debt service.

Distribution: Modified AIP apportionment run similar to CRSSA and ARPA coronavirus relief bills with remaining funds via enplanements. FAA to use enplanements in CY 2019 to determine funding in FYs 2022, 2023; funding in FYs 24, 25, 26 based on the most recent calendar year.

Local Match: Same as AIP.

Non-Primary Commercial Service/General Aviation Airports:

$2.5 billion/$500 million annually for GA and nonprimary commercial service airports.

Distribution: Similar to CRSSA, ARPA, distribution based on NPIAS categories; any non-distributed funds designated for Contract Tower airports for projects.

Local Match: Same as AIP.

Contract Tower Airports:

$100 million/$20 million annually for Contract Tower Program/Cost-Share Program to upgrade aging airport-owned ATC towers and to purchase equipment for those facilities.

Competitive grants to CT airports to "sustain, construct, repair, improve, rehabilitate, modernize, replace or relocate nonapproach control towers; acquire and install ATC equipment; or construct FAA-certified remote towers.

Local Match: None, Federal share is 100 percent.

New Airport Terminal Program: $5 billion/$1 billion annually for a new "airport terminal program."

Competitive Grants: DOT to distribute funds through competitive grant program

Distributed by Hub Size:

55% to LH

15% to MH

20% to SH

10% to NH and nonprimary airports

Eligible Projects: Terminal projects, including multimodal terminal development/on-airport rail projects. DOT required to consider projects that increase capacity, improve passenger access, replace aging infrastructure, expand accessibility for persons with disabilities, and improve airport access for historically disadvantaged populations.

Preferences and Priorities: DOT to provide a preference to projects that "achieve a complete development objective" even if those projects are phased over multiple years. It would also require DOT to prioritize projects that "have received partial awards."

Local Match: Federal share is 80% for LH, MH and 95% for SH and smaller.

FAA Facilities and Equipment: $5 billion/$1 billion annually for FAA Facilities and Equipment.

At least $200 million reserved for airports that participate in the FAA Contract Tower Program to upgrade aging FAA-owned ATC facilities.

Analysis/What's Next

The significance of the Senate's passage of this substantial legislation cannot be overstated. In the end, all 50 Senate Democrats voted for the BIB despite concerns about the lack of climate-friendly provisions. On the other hand, the BIB was able to receive the support of 19 Senate Republicans notwithstanding their worries over the bill's contribution of hundreds of billions of dollars to the national debt. Combine these dynamics with the twist and turns that have occurred throughout these negotiations and it is apparent that today's result is truly an important achievement.

Still, the BIB faces a precarious road ahead before it's able to be enacted into law. After passing the BIB, Majority Leader Chuck Schumer (D-NY) immediately moved the Senate towards consideration of the partisan, $3.5 trillion budget resolution, which contains a host of Democratic spending priorities like Universal pre-K and Medicare expansion. Unsurprisingly, Republicans are adamant in their opposition; however, as long as Senate Democrats remain united in moving forward, the Republican playbook is limited to delay tactics and forcing Senate Democrats to take difficult amendment votes. In the end, we expect the budget resolution to pass the Senate on party lines and for the Senate to recess until September.

What comes next is unclear. The House is currently scheduled to be in recess until September 20th. If the Senate passes a budget resolution by the end of this week, like we expect it will, House Democratic Leadership may call members back to Washington early to vote on a mirroring House budget resolution to help accelerate the process. Remember, House Speaker Nancy Pelosi (D-CA) has said she will not take up the Senate-passed BIB until the Senate also passes a reconciliation package, and given the sheer size and scope of the $3.5 trillion proposal, this will take many weeks for the Senate to assemble and pass into law. Additionally, moderate Senate Democrats like Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) will want ample input into what policies ultimately make up this package, meaning it is possible there could be infighting within the Democratic Caucus, which could cause delays.

The divide in the House between moderate and progressive Democrats is also a growing hurdle for the BIB. This week, a group of six moderate Democrats sent a letter to Speaker Pelosi calling for the Speaker to bring the infrastructure bill up for a vote as soon as the Senate passes it, while also expressing their concerns over the size of the $3.5 trillion budget resolution. On the other hand, progressives like Representative Alexandria Ocasio-Cortez (D-NY) have threatened their support for the BIB unless there is a massive reconciliation bill along with it. Additionally, House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR) continues to be critical of the BIB and has repeatedly called for a conference between the BIB and his House-passed INVEST Act, which he contends is much more climate forward. Speaker Pelosi only has a four-seat majority to deal with, and even if a few House Republicans provide their support for the BIB, she cannot afford to alienate either side of her caucus if she hopes to pass both bills.

Overall, airports have been one of the most successful industries in these bipartisan negotiations, reflected by the fact that the $25 billion proposed in President Biden's American Jobs Plan for aviation was maintained in the final BIB. This is a credit to airport relationships with and outreach to your Congressional delegations throughout this process. As our attention turns towards the House, we will need this same effort in order to get the BIB, and the much-need federal support for airport infrastructure that comes with it, over the finish line.