DALLAS – The House Transportation and Infrastructure Committee approved a bill Tuesday to spin off the Federal Aviation Administration’s air traffic control system to a nonprofit corporation that could issue debt supported by airline user fees.

House committee’s proposal would transfer FAA's air traffic control to a nonprofit corporation but does not raise the passenger facility charge.
House committee’s proposal would transfer FAA's air traffic control to a nonprofit corporation but does not raise the passenger facility charge.
Pittsburgh International Airport

Committee chairman Bill Shuster, R-Pa., said he wants a House vote on the 21st Century Aviation Innovation, Reform, and Reauthorization Act (H.R. 2997) in July before Congress breaks for its month-long August recess.

“The 21st Century AIRR Act continues to gain momentum, and I look forward to now taking up this bill in the House before August,” Shuster said. A similar measure supported by Shuster was passed by the committee last year but never came to a vote in the House.

The FAA’s authorization to collect fees and expend congressional appropriations would expire Sept. 30 unless extended by Congress. The House committee-approved measure would provide six years of authorization, while separate legislation (S. 1405) extending the FAA for four years will be considered Thursday by the Senate Committee on Commerce, Science, and Transportation.

The House committee’s proposal would transfer the air traffic system to a private corporation over three years.

A 13-member board that would set the user fees levied on airlines would govern the nonprofit corporation. The fee revenue could be used to support revenue bonds for equipment and facilities for the system.

The panel considered 86 amendments to the legislation introduced last week by Shuster but rejected most of them before approving the measure on an almost-party line vote of 32-25 after a lengthy debate.

Rep. Todd Rokita, R-Ind., was the only Republican to vote against Shuster’s FAA bill. He also opposed the 2016 bill to spin off the ATC system.

“The concept is fundamentally flawed,” Rokita said. “It really isn’t privatization. It’s corporatization of a monopoly.”

The panel rejected an amendment from ranking member Rep. Peter DeFazio, D-Ore., that would have a substituted a Democratic-supported measure (HR 2800) removing the Aviation Trust Fund from the annual budget process and sequestration curtailment. The amendment would have eliminated the ATC privatization provision and dedicated all revenues from federal taxes on airline tickets to the national aviation system.

“We can roll the dice with this risky privatization plan and hope it will bring improvements after several disruptive years of transition, or we can go with my targeted alternative that will fix the biggest problem facing the FAA—stable, predictable funding,” DeFazio said. “Privatization is a solution in search of a thousand problems, and it is sure to find them.”

The trust fund, which had a balance of $14.8 billion at the beginning of fiscal 2017, supports the FAA’s Airport Improvement Program grants and provided 80% of the funding for FAA operations in fiscal 2016.

Shuster's legislation would provide $51.1 billion to the FAA in the first three years, but only $14 billion in the final three years because the ATC privatization would transfer some 30,000 air traffic controllers and other FAA employees to the new nonprofit corporation. The FAA would maintain its oversight of aviation safety.

The proposal being considered by the Senate committee, which would keep ATC within the FAA, authorizes $68 billion for the agency over four years.

The Senate measure would fund the FAA’s Airport Improvement Program grants in fiscal 2018 at the current level of $3.35 billion and then boost the grants to $3.75 billion per year in fiscal 2019 through 2021.

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