USCTA Alert

July 3, 2025

After a marathon session, the House today passed H.R. 1, the One Big Beautiful Bill Act – a massive budget reconciliation package that extends the 2017 tax cuts and contains $12.5 billion for air traffic control modernization. The vote was 218 to 214. Today’s action clears the way for the President to sign the bill into law, giving him and GOP leaders a major legislative victory.
 
ATC Reform
 
The final reconciliation package includes $12.5 billion to modernize the nation’s air traffic control system with specific funding levels that match the Senate Commerce Committee proposal. Of that total amount, $4.75 billion is slated for telecommunications upgrades and $3 billion for radar system replacement – the same funding levels included in the House-passed version of the bill.
 
The final bill also includes $1 billion for recapitalization and consolidation of terminal radar approach control facilities, $500 million for runway safety initiatives, and $50 million for remote towers. The bill also includes $100 million for tower simulators, but does not contain $1 billion for controller recruitment, retention, and training that the House approved.
 
The final package also excludes funding to replace aging ATC towers as AAAE and USCTA recommended. As a reminder, the House-passed bill included $2.16 billion for ATC tower and terminal approach control facility replacement. It also called for not less than $240 million of that amount to be reserved for contract towers and other sponsor-owned ATC towers.
 
Airport Bonds
 
Airports scored a big win on the defensive side of the ledger. The final reconciliation package does not contain proposals to eliminate tax-exemptions for private activity bonds (PABs) and municipal bonds. AAAE and other stakeholders urged Congress to preserve the tax-exempt status for bonds to help airports finance infrastructure projects and avoid paying higher borrowing costs.
 
Doing away with tax exemptions for PABs and municipal bonds could have saved the federal government an estimated $365 billion over 10 years, potentially making them attractive offsets. One large hub airport indicated that eliminating tax-exempt debt would cost it approximately $940 million over planned bond deals in 2026, 2028, and 2030.
 
NEPA
 
The reconciliation package includes language that will allow airports to pay a fee for the preparation or supervision of an environmental assessment (EA) or environmental impact statement (EIS) in exchange for an expedited NEPA review (180 days for an EA and one year for an EIS). The bill requires the fee to be 125 percent of the anticipated cost for the FAA to prepare or supervise the airport’s preparation of the EA or EIS.
 
Homeland Security
 
The bill includes funding for 5,000 new CBP officers and retention bonuses.  It also includes $625 million in FEMA grants for security and other costs related to the 2026 FIFA World Cup and $1 billion for security, planning, and other costs related to the 2028 Olympics in Los Angeles.