Senate Begins to Debate FAA Reauthorization

A dispute with the aviation industry over who should bear the larger share of the tax burden for upgrading aviation systems had delayed Senate consideration, but new controversies are dragging the debate out in the Senate. The Senate bill contains a controversial provision to fix the predicted revenue shortfall in the Highway Trust Fund with new taxes, which has tied up the debate. 

The House passed H.R. 2881, the FAA Reauthorization Act of 2007, in September 2007 and the Senate Commerce, Science, and Transportation Committee reported its version of the bill in August 2007. Congress has passed temporary extensions of airport programs since then.  

The White House threatened to veto the bill over funding levels, Congress’ unwillingness to adopt massive changes in the structure and funding of the federal airport programs and provisions that would provide a temporary fix to the projected short fall in the Highway Trust Fund, which would be funded with a 5-cent-per-barrel increase in the tax on oil spills.

The Administration also opposes renewal of the Essential Air Services program, which provides subsidies to small airports that would not otherwise be served by commercial airlines and extension of the Community Air Service Development Program, which helps small airport markets. 

For local governments, the bill includes important programs to distribute funds to municipal airports under the Airport Improvement Program (AIP). The House-passed version also would increase the ceiling for airports to impose a passenger facility charge (PFC) from the current $4.50. The Senate bill does not address an increase in the PFC, which is strongly opposed by the commercial airlines.

AIP provides federal grants for airport development and planning and is usually spent on projects that support aircraft operations such as runways, taxiways, aprons, noise abatement, land purchase and safety or emergency equipment that are supposed through user fees and fuel taxes.

While debate thus far on the bill has focused on airline pensions, questions of safety, FAA oversight and passenger rights remain on the agenda for the Senate to discuss. Republicans are seeking to strip the Highway Trust Funding provisions from the bill. 

The Senate version of the bill would provide FAA programs at $65 billion through 2011, including $400 million for modernizing the air traffic control system and $16 billion for airport infrastructure grants. The bill provides funding for the Essential Air Service (EAS) program at a level of $133 million annually, an increase of $6 million per year. The act also would provide the Department of Transportation with flexibility to encourage better service by incorporating financial incentives into EAS contracts, or signing longer term contracts.