The House Transportation and Infrastructure Committee begins consideration today of a multiyear Federal Aviation Administration bill that would authorize $16.2 billion for bond-related airport grants.
The nearly $70 billion total package would replace a series of stopgap measures that have kept the FAA afloat during the past 18 months, after lawmakers failed to reach compromise on new authorization legislation.
"Short-term funding extensions and continuing resolutions have led to delays in capital projects," said Rep. James L. Oberstar, D-Minn., the committee's chairman. Aviation subcommittee chairman Jerry F. Costello, D-Ill., said he expected the House to approve the bill quickly but that the committee would "look to the Senate to do so as well," underscoring the possibility of the bill stalling in the Senate.
The committee holds a hearing on the package today. However, a vote has not yet been scheduled, said spokesman Jim Berard.
The package would address some long-held requests by airport lobbying groups. It would raise the passenger facility charge cap to $7 from $4.50, which the FAA says would generate about $1.1 billion in additional annual revenue for airport development. It also would authorize $16.2 billion for the airport improvement program. AIP funding can be used to back bonds, but more often issuers use the funds to supplement other revenue sources such as bond proceeds.
According to the committee, the bill would give "significant increases" in AIP funding for smaller airports. In addition, it would bump up and extend annual funding for two programs that are intended to help small community airports and non-hub airports. The essential air service program would receive $200 million per year, up from $127 million per year under the current law, and the bill would extend the small community air service development program at its current authorized funding level of $35 million per year.
The bill also would authorize spending for FAA operations, air traffic control improvements, and number of safety and environmental provisions, among other things.
Smaller airports have faced credit rating concerns in recent months. The sector was put on negative watch by Moody's Investors Service in August, a day after Standard & Poor's said it found smaller- and medium-sized airports generally had poorer credit ratings than larger hub airports. Airport debt backed by PFCs was "of particular concern" to Moody's because of its reliance on passenger traffic.
"We were pleased that the House recognized that airports need additional funding," said Deborah McElroy, executive vice president of policy and external affairs for Airports Council International-North America. The AIP funding alone is about a half-billion dollars more than was authorized previously, she said.
Asked whether AIP funding included in House and Senate stimulus bills could cause lawmakers to cut the committee's proposed amount of AIP authorization, ACI-NA's government affairs director Annie Russo pointed out that the FAA said it could spend $5 billion for AIP projects over 2009 and 2010 alone. The group will ask the House Transportation and Infrastructure Committee today for an even larger PFC cap increase - to $7.50 from $4.50 - indexed to construction cost inflation, Russo added.
The FAA is currently funded by a continuing resolution that lasts through March 6. The most recent attempt to reauthorize the program, in May 2008, was thwarted mostly by Republicans, who opposed the bill due to several non-aviation provisions in the bill, such as $1 billion for railway infrastructure bonds and $5 billion for the highway trust fund.
Senate Democratic leaders failed to secure a cloture vote that would have limited debate and prevented a filibuster by Republicans opposed to the legislation.
