Reauthorization of the Federal Aviation Administration

Reauthorization of the Federal Aviation Administration

Order Code IB10121
CRS Issue Brief for Congress
Received through the CRS Web
Reauthorization of the
Federal Aviation Administration
Updated September 26, 2003
Bartholomew Elias, John Fischer, and Robert Kirk
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
State of the Aviation Industry
Competition and Delay Issues
Reagan National Airport Slots
War Risk Insurance
Improving Air Service to Isolated Communities
Airport and Airway Trust Fund (Aviation Trust Fund) Issues
Airport Development
Reauthorization Proposals and Issues
Apportionment and Eligibility Changes: Relief and Support to Small Airports
Discretionary Fund Changes
Airport Noise Issues
Passenger Facility Charge Issues
Privatization
Airport Security Project Eligibility
Runway Safety Areas
Environmental Streamlining
Airway Facilities Improvements and Air Traffic Modernization
Cost Sharing for Air Traffic Modernization Projects
Wake Vortex Advisory System
Ground-Based Precision Navigation Aids
Gulf of Mexico
Enhancing the Safety and Security of the Aviation System
Security Enhancements at Airports
FAA Oversight of Operators and Maintenance Facilities
Aviation Maintenance Training and Manuals
Flight Attendant Certification
Cabin Air Quality
Investing in the Future of Aviation
Coordination of Research and Development Efforts
Aviation and Aerospace Education
Identified Research Programs
FAA Organizational Issues
Chief Operating Officer (COO)
Air Traffic Control Privatization
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
FOR ADDITIONAL READING

IB10121
09-26-03
Reauthorization of the Federal Aviation Administration
SUMMARY
The Wendell H. Ford Aviation Invest-
– Century of Aviation Reauthorization Act,
ment and Reform Act for the 21st Century
was passed by the House of Representatives
(FAIR21 or AIR21; P.L. 106-181), which
(Roll Call 264). The House bill proposes a
currently provides authorization for the Fed-
total budget of $58.2 billion over 4 years, for
eral Aviation Administration (FAA) and
airport improvements, facilities and equip-
related aviation programs, expires at the end
ment, and FAA operations and maintenance.
of FY2003. Consequently, the 108th Congress
Legislation to reauthorize the FAA’s research,
has been engaged in the process of drafting
engineering and development functions was
and debating legislation to reauthorize the
never considered during House floor action.
FAA and related aviation programs for future
Parts of House introduced legislation, H.R.
years.
2734 and H.R. 2271, are part of the confer-
ence agreement discussed below.
A number of issues have risen to promin-
ence in the reauthorization debate. The condi-
On June 12, 2003, the Senate passed its
tion of the airline industry, while not directly
version of H.R. 2115, striking out the House
addressed in the bills, has had an impact on
language and substituting the amended lan-
the debate because the aviation industry's
guage of S. 824. The Senate proposal is for a
recessionary environment has constrained the
three-year reauthorization totaling $43.5
trust fund revenues that support most of the
billion, for airport improvements, facilities
FAA budget. Increasing capacity and reducing
and equipment, FAA operations and mainte-
future congestion and delay are issues that are
nance, and research, engineering and develo-
addressed in both airport development propos-
pment. While the Senate proposal provides
als as well as proposals concerning air traffic
somewhat lower funding levels than the
modernization. "Environmental streamlining"
House, both the Senate and the House bills
is also a major element of the reauthorization
would provide more funding than the adminis-
debate, involving proposals to expedite
tration’s request of $57.3 billion over four
environmental reviews potentially affecting
years.
the completion of airport capacity capital
projects. Funding security enhancements at
On July 25, 2003, Vision 100 - Century
airports without depleting the Airport and
of Aviation Reauthorization Act (H.Rept. 108-
Airway Trust Fund of funds needed to support
240) was reported out of conference. The
the national system’s other needs has become
conference bill would provide $59.2 billion
a significant issue in the debate. Subsidizing
over 4 years for FAA activities Several provi-
air service to isolated communities is a peren-
sions of the conference bill are controversial,
nial issue in FAA reauthorization as are other
however, and have so far prevented the bill
issues such as federal aid for airport noise
from being considered in either the House or
mitigation, aviation safety, and air traffic
the Senate. Most notable of these is a provi-
control privatization.
sion that would prevent privatization of cer-
tain air traffic control functions, but allow
On June 11, 2003, H.R. 2115, Flight 100
privatization of designated airport towers.
Congressional Research Service
˜ The Library of Congress

IB10121
09-26-03
MOST RECENT DEVELOPMENTS
On June 11, 2003, H.R. 2115, Flight 100 – Century of Aviation Reauthorization Act,
was passed by the House of Representatives (Roll Call 264). On June 12, 2003, the Senate
passed a version of H.R. 2115 striking out the House language and substituting the amended
language of S. 824 (Record Vote Number 225). On July 25, 2003, Vision 100 - Century of
Aviation Reauthorization Act (H.Rept. 108-240) was reported out of conference.
BACKGROUND AND ANALYSIS
The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
(FAIR21 or AIR21; P.L. 106-181), which currently provides authorization for the Federal
Aviation Administration (FAA) and related aviation programs, expires at the end of fiscal
year 2003. Consequently, the 108th Congress has been engaged in the process of drafting and
debating legislation to reauthorize the FAA and related aviation programs for future years.
The Senate proposal for FAA reauthorization, the Aviation Investment and Revitalization
Vision Act (AIR-V, S. 824), was reported in the Senate and proposed a three-year
reauthorization for FY2004-FY2006 totaling $43.5 billion. The House proposal, H.R. 2115,
dubbed Flight-100 in commemoration of the 100th anniversary of powered flight, would have
reauthorized the agency’s operations, facilities and equipment, and airport planning budgets
for four years at funding levels slightly higher than those proposed in the Senate bill, totaling
$58.2 billion over 4 years. The Federal Aviation Administration Research and Development
Reauthorization Act (H.R. 2734)(not considered on the House Floor) proposed spending of
about $200 million per year over 3 years for FAA’s research, engineering, and development
program, while the Second Century of Flight Act (H.R. 2271), an alternative introduced in
the House, proposed a three-year funding plan at levels identical to the Senate bill.
Both the Senate and House bills provided for slight increases in funding across all
program areas over the next three and four years respectively. By comparison, an earlier
Administration’s four-year proposal, also called Flight-100, proposed flat funding for airport
development, held fixed at $3.4 billion per year, minor increases for other programs and
significantly reduced funding for Research, Engineering, and Development.
The recently completed conference bill (H. Rept 108-240) adopts the Senate plan for
airport improvements funding levels starting at $3.4 billion in 2004 and providing $100
million annual increases thereafter.
The conference report also provides increased
authorization levels for facilities and equipment in 2004, and significantly higher
authorization levels for research, engineering, and development. The conference report
otherwise mirrors the House version of H.R. 2115 with regard to program funding
authorizations. A summary of the proposed funding authorizations in the House, Senate, and
Administration bills and the Conference Report is provided in Table 1.
This issue brief discusses major elements of the proposed legislation and significant
issues that may be considered during remaining debate over FAA reauthorization including:
the economic outlook for the aviation industry and its impact on aviation program funds;
initiatives to promote and ensure air service for isolated communities; funding for airport
CRS-1

IB10121
09-26-03
development; initiatives to improve aviation safety and security; initiatives to promote
aviation and aerospace research and technology; and FAA organizational issues.
Table 1. Reauthorization Funding Levels by Program ($ Billion).
Program
FY 2004
FY 2005
FY 2006
FY 2007
Airport Improvement Program
Admin:
3.400
3.400
3.400
3.400
(AIP)
Senate:
3.400
3.500
3.600
--
House:
3.400
3.600
3.800
4.000
Conference:
3.400
3.500
3.600
3.700
Facilities and Equipment
Admin:
2.916
2.971
3.031
3.098
(F&E)
Senate:
2.916
2.971
3.030
--
House:
2.938
2.993
3.053
3.110
Conference:
3.138
2.993
3.053
3.110
FAA Operations and
Admin:
7.591
7.732
7.889
8.064
Maintenance (O&M)
Senate:
7.591
7.732
7.889
--
House:
7.591
7.732
7.889
8.064
Conference:
7.591
7.732
7.889
8.064
Research, Engineering, and
Admin:
0.100
0.102
0.104
0.107
Development (RE&D)
Senate:
0.289
0.304
0.317
--
House*:
0.190
0.207
0.228
--
Conference:
0.346
0.356
0.352
0.356
TOTAL
Admin:
14.007
14.205
14.423
14.669
Senate:
14.196
14.507
14.836
--
House**:
13.929
14.325
14.742
15.174
Conference:
14.475
14.581
14.894
15.230
*House RE&D provisions introduced in H.R. 2734.
**House totals do not include RE&D provisions in H.R. 2734.
State of the Aviation Industry
Reauthorization of the FAA is occurring against the backdrop of the effects of the war
in Iraq, Severe Acute Respiratory Syndrome (SARS) and lingering concerns about terrorism
dating back to September 11.
All facets of the aviation industry are operating in a
recessionary environment, even though the official recession as defined by the Treasury has
ended. According to the FAA's Aerospace Forecasts for Fiscal Years 2003 - 2014 (issued
March 2003), any recovery in the demand for aviation services was "stalled" even before the
Iraq war started. There was an expectation, now realized, that the demand for aviation
services would decrease if a war took place. In the first quarter of 2003, United Airlines
alone had losses of $1.3 billion and most other U.S. air carriers, with the notable exceptions
of Southwest and some other newly emergent air carriers, lost equally impressive sums. The
economic pain of the current situation is not limited to the airlines, but extends across the
broad spectrum of aviation industry activities.
Reauthorization is not normally viewed as a vehicle for addressing the overall financial
health of the aviation industry. During consideration of AIR21, the focus was on making
CRS-2

IB10121
09-26-03
sure that there would be enough air traffic control and airport capacity to facilitate the rapid
growth occurring in all sectors of the industry at that time. This imperative was particularly
important to the authors of AIR21, who raised funding for many FAA programs, but
especially the airport improvement program (AIP).
Although aviation growth is currently "stalled" it is believed that this situation is
temporary. The same FAA forecast mentioned above expected that industry growth would
resume later this year, albeit at lower levels then those experienced at the end of the 1990s.
It is hoped, barring further destabilizing incidents, that this industry will return to its
historical growth patterns. When growth does recur many of the same concerns about
overtaxed infrastructure will return.
Competition and Delay Issues. The Senate bill addresses a number of long-
standing concerns about competition and delay in the overall aviation system and at key
airports. A provision of the Senate bill allows the Secretary of Transportation to call for
meetings between the FAA and airlines if it is deemed necessary to consider flight
reductions/rescheduling at an airport. These meetings are to be held using procedures
developed by the Secretary. At the moment, specific airport flight delays are not an issue,
but prior to September 11 these issues arose at a number of congested airports including, for
example, New York LaGuardia and Chicago O'Hare. Without this process a meeting
between airlines to discuss schedules would run afoul of antitrust concerns. Another
provision in the Senate bill requires that hub airports denying airline requests for facilities
must notify the Secretary as why the request was denied and also identify when they expect
to be able to fulfill the airline request.
The House bill also has provisions that allow for scheduling meetings during "capacity
reduction events." The House plan creates a demonstration or pilot program that allows
"collaborative decision making" at three airports during congested periods, in the interest of
improving efficiency. There are a number of conditions that must be met for a scheduling
meeting to take place and the Secretary of Transportation can offer limited immunity from
antitrust law. The program is to run for two years, but can be extended for an additional two
years and expanded to include up to seven additional airports.
All of the provisions discussed above are now part of the conference bill, although some
aspects of each proposal have been modified. For example, the pilot program only allows
for two airport participants during the first two years instead of three and the denial of
facilities provision is now a biannual reporting requirement. All of these provisions while
seemingly straight forward, potentially raise issues about DOT intrusion into the business
decisions of airlines and local airport operators and may become controversial in the future.
Reagan National Airport Slots. There are four slot-controlled airports in the
United States. In only one instance, Reagan National Airport, are the slots determined by
federal statute. Reagan National has long operated with limited slots (takeoffs and landings)
and with a perimeter rule that limits flights beyond 1,250 miles. These rules were originally
put in place to move long haul flights to the then underutilized Dulles International Airport,
and legislation that created the Washington Metropolitan Airport Authority in the mid-1980s
reaffirmed them in federal statute. These rules have always been controversial. Many
Washington area residents support the existing slot system and object to additional flights
for noise and other environmental reasons. Some residents of states outside the perimeter
CRS-3

IB10121
09-26-03
have been opposed to these rules, protesting their lack of access to the area's most convenient
airport.
AIR21 broke the perimeter barrier for the first time, by allowing a limited number of
additional slots for service beyond the perimeter. The House bill increases the number of
slots at National adding 12 new exemptions to existing slot rules for flights outside the
perimeter and 8 new exemptions for flights within the perimeter. As modified by a managers
floor amendment the slots within the perimeter would not be reserved for new entrant
carriers, but would be competitively available to all airlines. A further addition to the bill
on the House Floor redesignates commuter slots so that they could be used by aircraft with
76 seats or less. This provision accommodates new regional jet aircraft such as those recently
purchased by US Airways.
The Conference bill essentially adopts the House provisions. The bill, however,
suggests that DOT consider the possibility of expanding service to western cities that could
be viewed as gateways as part of its route selection process.
War Risk Insurance. Immediately following the events of September 11th private
market insurance firms stopped offering terrorism coverage as part of their offerings to the
airline industry. This was partially a response to the potentially large costs engendered by
claims resulting from the terrorist actions and partially a concern that the announced "war
on terrorism" might make this an even more risky insurance product in the years ahead.
Although air carriers have traditionally provided at least some degree of insurance self
coverage, they have always been reliant on the larger insurance and reinsurance markets to
provide catastrophic coverage. And they must carry coverage in order to satisfy operating
certificate requirements (all airlines must have an operating certificate issued by DOT), lien
holders, and other interested parties.
Federally offered war risk insurance has been a feature of federal aviation policy since
the cold war era. It is considered an important element in the Civilian Reserve Air Fleet
(CRAF) program that makes civilian aircraft available to the military in times of national
emergency. In light of the lack of a private market for terrorism insurance at what is
considered a reasonable price, Congress has offered the airline industry extended coverage
under the war risk program. This coverage has been extended several times, most recently
by the emergency wartime supplemental appropriations for FY2003 (P.L. 108-11) which
provides coverage until the end of 2004. Reauthorization proposed in the Senate bill would
extend this coverage until the end of 2007, thereby giving U.S. air carriers an extended
period of certainty on the availability of coverage. An amendment adopted in Committee
would extend war risk insurance to aircraft manufacturers for the first time. Eligibility would
be at the discretion of the Secretary and could only apply for loss or damage claims of over
$50 million. The House bill also extends war risk insurance to the end of 2007 for the
domestic market. However, for international flights the House proposes to make federal war
risk insurance availability permanent. The Conference bill is similar to the Senate version,
but extends the program until March 30, 2008.
Subject to DOT approval, aircraft
manufacturers will be able to obtain war risk insurance in certain circumstances.
Improving Air Service to Isolated Communities. The Essential Air Service
(EAS) program and the Small Community Air Service Development (SCASD) Pilot Program
were designed to address the difficulties in obtaining and maintaining air service in small,
CRS-4

IB10121
09-26-03
isolated communities where access to the national air transportation system is limited. Both
the House and the Senate bills and the conference bill seek to reauthorize these programs and
restructure the EAS program. Additionally the House bill and the Conference bill propose
to establish a National Commission on Small Community Air Service.
The Essential Air Service Program.
EAS provides subsidies directly to air
carriers for providing service between selected small communities and hub airports. The
program was originally established in 1978 as part of airline deregulation to ensure a
minimum level of air service at smaller communities that may otherwise lose service because
of economic factors. At present, 125 communities in the United States and its territories
participate in the EAS program and this number is expected to increase given that current
financial conditions may prompt air carriers to discontinue service without subsidies.
However, the effectiveness of the current EAS program has been questioned as total
passenger traffic among EAS communities has declined 20% since 1995.
The Senate seeks to authorize a funding level of $113 million per year for EAS, while
the House bill would authorize funding levels of $115 million per year. The conference bill
would authorize a total of $127 million annually, of which not more than $12 million would
fund the proposed marketing incentive program included from the Senate bill. Several
modifications have been proposed to increase program flexibility and transportation options
to link EAS communities to the national aviation network.
The Senate plan incorporated into the conference bill includes a marketing incentive
program that can provide EAS communities with grants of up to $50,000 for implementing
marketing plans to increase ridership. Communities must be willing to match 25% of the
grant with non-Federal funds, but the proposal includes incentives to offset these costs,
dropping the non-Federal share to 10% the following year if the community realizes a 25
percent gain in ridership, and to zero if the community achieves a 50 percent increase in
ridership. The Senate and Conference bills would authorize up to $12 million each year to
fund this initiative. The Senate and Conference bills also include a proposed community
flexibility plan allowing up to 10 EAS communities to opt out of the program for a 10-year
period in exchange for a grant equivalent to 2 years of EAS.
The House bill contains additional provisions for a community and regional choice
program as an alternate to EAS that were incorporated into the conference bill. The
community and regional choice program would be established an alternative to EAS in which
eligible communities are funded directly and can then use the funds toward a variety of air
transportation options that are not available under the traditional EAS program. Eligible
communities would be able to use funds received to provide subsidies to an air carrier or an
on-demand air taxi service; for scheduled or on-demand surface transportation linking the
community with another airport; to purchase aircraft or fractional ownership in aircraft; or
to pay for other transportation options approved by the DOT. The Conference bill would
delay use of fractionally owned airplanes until the FAA issues specific rules pertaining to
fractional ownership.
An amendment to the House bill that was incorporated into the Conference bill would
require the DOT to establish a consistent standard for calculating milage and to consult with
state officials when calculating the most commonly used highway distance to a hub airport
CRS-5

IB10121
09-26-03
when determining EAS eligibility. The Senate version contains a similar provision that
would only apply to Lancaster, Pennsylvania.
Small Community Air Service Development Program. Both the House and
Senate bills contain provisions to reauthorize the Small Community Air Service
Development (SCASD) Pilot Program. The program was established under AIR 21 to
develop solutions for improving air carrier service to communities that are experiencing
insufficient access to the national air transportation system. The funding provides direct
grants to selected communities for implementing strategies to improve the availability and
pricing of air service. The General Accounting Office (GAO) has cautioned that it is still too
early to assess the long term impact of this program and has noted that many of the programs
receiving grants appear similar to prior programs tried by communities using state, local, and
private funds and may not be sustainable beyond the period of subsidized funding. The
Senate bill specifies $27.5 million per year for the program, whereas the House bill and the
conference bill would authorize $35 million per year. While the House bill sought to remove
the per state limit on grants, the conference bill would set a limit on grants recipients to 4 per
state each fiscal year. The conference bill would remove the designation of the program as
a ‘pilot’ program.
Airport and Airway Trust Fund (Aviation Trust Fund) Issues
The airport and airway trust fund, also known as the aviation trust fund, provides all
funding for three of the FAA's four major programs; the Airport Improvement Program
(AIP), Facilities and Equipment (F&E), and Research, Engineering, and Development
(RE&D). It also provides significant funding for the Operations and Maintenance Program
(O&M). O&M, however, as a result of long standing agreements, also receives funding from
U.S. Treasury General Funds. The split between trust fund and general fund monies on
O&M has always been somewhat controversial and could again become an issue in this
reauthorization cycle.
The poor economic condition of the aviation industry is having a negative effect on trust
fund revenues. Trust fund revenues more than doubled between FY1990 ($4.9 billion) and
FY2000 ($10.7 billion). The trend, however, changed dramatically in the new century. In
FY2001, revenues fell slightly to $10.2 billion. In FY2002 they dropped slightly again to
$10.1 billion. Predictions made prior to the Iraq War, which now might be optimistic,
foresaw a slight increase in FY2003 to $10.2 billion, followed by a recovery in more typical
growth to an FY2004 level of $11.1 billion.
Because aviation spending has remained
constant, as required by AIR21, there has been a steady decline in the uncommited balance
in the trust fund, which stood at $4.8 billion at the end of FY2002.
AIR21 created a budgetary regime for aviation programs that was closely linked to the
availability of funds in the trust fund. In simple terms, appropriators were required to fully
fund AIP and F&E at authorized levels, and must further account for all trust fund revenues
prior to determining the general fund share that would be provided for O&M in a fiscal year.
This is a part of the so-called funding "guarantee" that is designed to insure that all trust fund
income is spent on aviation and not other transportation activities. Both the House and
Senate bills continue this process as does the Conference bill.
CRS-6

IB10121
09-26-03
The Senate, House, and Administration reauthorization proposals call for only modest
growth in the FAA budget (just over $14.0 billion in FY2004). The House, however,
provides somewhat more funding over four years, primarily for the AIP program. The
Conference bill is a compromise. It adopts the House’s four year structure, but reduces its
AIP funding amounts slightly in favor of increases in other FAA program areas. By
maintaining the growth in spending at a modest level the fill seems to side step any trust fund
solvency concerns.
Airport Development
The Airport Improvement Program (AIP) provides federal grants for airport
development and planning. AIP funding is usually limited to capital improvements related
to aircraft operations. Commercial revenue producing portions of airports and airport
terminals are improvements that generally are not eligible for AIP funding. AIP money
cannot be used for airport operational expenses or bond repayments.
AIP funds are
distributed either as formula grants or as discretionary grants. Under AIR21, roughly
two-thirds of AIP funding was distributed by formula and the remaining third as
discretionary grants. Small airports are much more dependent on AIP grants than large and
medium hub airports. These airports can more easily generate revenue from user fees and
have historically had the financial wherewithal to successfully access the bond market.
The Passenger Facility Charge (PFC) program provides a source of non-federal funds
intended to complement AIP spending. The PFC is a local tax imposed, with federal
approval, by an airport on each boarding passenger. PFC funds can be used for a broader
range of projects than AIP grants and are more likely to be used for "ground side" projects.
PFCs can also be used for bond repayments (a more detailed description of airport funding
can be found in CRS Issue Brief IB10026).
Reauthorization Proposals and Issues. Both the House and Senate bills include
provisions that would impact the AIP program's long standing priorities and objectives.
Although the bills include a number of similar provisions their core proposals are focused
on different goals. As shown in the earlier table, both bills provide modest increases in AIP
funding. Much of the Senate bill’s legislative attention is directed toward facilitating
capacity enhancing projects, especially toward the major airports included in the FAA's 2001
Airport Capacity Benchmark study. The House bill redirects some funds from large airports
to smaller airports and cargo airports. The bill attempts to address a broad range of concerns
about the operation of the AIP program and make perfecting rather than major changes. The
Conference agreement includes a blend of the House and Senate proposals.
Apportionment and Eligibility Changes: Relief and Support to Small
Airports. The conference agreement includes provisions that protect small airports from
having their apportionments reduced in FY2004 because of reduced traffic levels. Cargo
airports formula percentage would be raised to 3.5%. Non primary airports would be
allowed to use their entitlements for revenue generating areas if the Secretary of DOT
determines that the sponsor has made adequate provisions for the airside needs of the airport.
Discretionary Fund Changes. The conference agreement would increase the
discretionary set aside for noise compatibility projects from 34% to 35%. Eligibility would
CRS-7

IB10121
09-26-03
be expanded to include noise mitigation projects approved in an environmental record of
decision for projects designated as national capacity projects.
Airport Noise Issues. Airport noise policy is linked to airport development because
airport noise is a major factor in local resistance to airport capacity projects. The conference
agreement includes provisions effecting the availability of AIP grants for state and local
governments land use compatibility plans. The bill, as mentioned earlier, would raise the
noise AIP set-aside to 35%, and includes language to make noise mitigation projects,
approved in an environmental record of decision for a project designated as a national
capacity project, eligible for AIP noise mitigation funding. This appears to provide, under
certain conditions, for AIP funding of projects at airports that have not submitted a noise
compatibility plan, as is now required.
Passenger Facility Charge Issues. The conference agreement includes provisions
to streamline PFC public notice requirements as well as ending the "significant contribution"
project requirement on large and medium hub airports that wish to impose PFCs at the $4
and $4.50 level. The requirement of notice and consultation of air carriers at applicant
airports is limited to carriers that have no less than 1% of the boardings at the airport, 25,000
boardings, or provides scheduled service at the airport. The bill would also establish a pilot
program to test alternative procedures for authorizing small airports to impose PFCs. The
bill also makes conversion of ground support equipment to low emission technology eligible
for PFC funds. The agreement also empowers the Secretary to allow the use of PFCs for
debt service for indebtedness on non-eligible non-airport related projects if the Secretary
finds that such project funding is necessary due to an airports financial need.
Privatization. The conference agreement would amend the Airport Privatization Pilot
Program, dropping, for small and non-hub airports, the requirement that 65% of airlines at
an airport approve of the privatization. Air carrier nonapproval would have to be filed within
60 days or approval would be granted.
Airport Security Project Eligibility.
The conference agreement repeals the
authority to use AIP or PFC funds for airport security purposes. These costs are to be paid
for from a proposed Aviation Security Capital Fund (see "Security Enhancements at
Airports", below).
Runway Safety Areas. The House bill contains a provision that would make runway
improvement grant approvals contingent on assurances that the sponsor will, to the
maximum extent possible, improve the runway’s safety area to meet FAA standards for
passenger airports. However, the bill also contains a provision that would prohibit the FAA
from reducing an airport’s runway length or declaring a runway less than the actual pavement
length to meet runway safety area criteria for passenger airports. The Conference bill limits
the applicability of this provision to airports in Alaska and directs the DOT to study the
potential impact of applying these runway safety area standards at airports in other states.
Reducing runway length may limit access by larger aircraft at certain airports and may
limit future expansion of air service. The NTSB recently recommended that runways at
passenger airports be upgraded immediately to meet FAA’s runway safety area criteria
following the March 5, 2000 mishap at Burbank, CA, where a Southwest Boeing 737 overran
the runway.
CRS-8

IB10121
09-26-03
Environmental Streamlining. The House and the Senate both include provisions
that can be described as proposals to accelerate the completion of major airport safety and
capacity projects by streamlining the environmental review process.
The conference agreement designates the DOT as the lead agency in the project review
process and directs the Secretary to develop a coordinated process for major airport capacity
projects that will assure simultaneous review by all government agencies. The agreement
adopted much from the House bill which included the most extensive environmental
streamlining provisions. The bill provides detailed information on how environmental
reviews are to be conducted to reduce the amount of time and number of reviews required
for new airport project approval.
Airway Facilities Improvements and Air Traffic Modernization
Airway Facilities consist of elements that comprise the infrastructure of the national
airspace system and include navigational aids, communications equipment, radar equipment,
weather equipment, air traffic management systems, and so on. Funding for the acquisition,
operation, and maintenance of airway facilities is derived from the Airport and Airway Trust
Fund and comprises about 20% of FAA’s spending.
FAA programs to improve the
accessibility, capacity, and safety of the national airspace system have been the subject of
Congressional scrutiny and frequent criticism over the past 20 years as the result of numerous
cost overruns, schedule delays, and failures to meet program objectives. While current
economic conditions have decreased the demand on the aviation system, FAA faces a critical
challenge in the next 5 to 10 years to enhance the performance of the national airspace
system to meet anticipated growth in demand. An amendment to the House bill would
authorize $200 million for exploring new, innovative procurement techniques for
modernizing air traffic control systems.
Cost Sharing for Air Traffic Modernization Projects. The Senate bill contains
provisions to foster non-federal investment in critical air traffic control facilities and
equipment, such as airport navigation capabilities, weather sensing, runway lighting, and air
traffic control towers, by providing permanent authorization to carry out up to 10 cost-
sharing air traffic modernization projects each fiscal year. Under the plan, cost-sharing
arrangements between the FAA and non-federal sponsors such as an airport, an air carrier,
or a joint venture between an airport and one or more air carriers, can be made to fund
airport-specific air traffic facilities and equipment. This concept was demonstrated in a
three-year pilot program, enacted as part of AIR21, that funded 10 air traffic modernization
projects where sufficient federal funds were unavailable. However, under the program
proposed in the Senate bill federal funds for a project would be limited to the lesser of one-
third of the total program cost or $5 million, as compared to a $15 million cap in the pilot
program. The proposed changes will allow more flexibility in the composition of non-
federal project sponsors, allowing airlines to participate without establishing a partnership
with an airport. However, the current economic status of the airlines makes it unlikely that
they will provide a significant near-term source of non-federal funding for air traffic
modernization projects. Also, the smaller cap on federal funds may mean that smaller scale
projects may be undertaken in the future. This program is most likely to benefit those
airports that derive larger revenues from PFCs and commercial activity and, consequently,
are capable of funding larger scale air traffic modernization projects with more limited
federal funding.
CRS-9

IB10121
09-26-03
Wake Vortex Advisory System. The House bill authorizes $20 million per year
of facilities and equipment expenses for FY2004-FY2007 to demonstrate the operational
benefits of a wake vortex advisory system. The Senate bill, on the other hand, directs the
National Research Council to conduct an assessment of FAA’s wake turbulence research
program. The conference bill authorizes $500,000 for fiscal year 2004 to carry out the
Senate-proposed assessment, and such sums as may be necessary for development and testing
of wake vortex advisory systems.
Wake vortices produced by heavy jet aircraft have been identified as factors in a small
number of aircraft accidents, and the contribution of a wake turbulence encounter in the
November 2001 crash of American Airlines flight 587 at JFK airport, the second deadliest
in U.S. history, is still under investigation. Current air traffic procedures specify separation
standards for aircraft departing behind large and heavy jets to allow their wake vortices to
dissipate. Some view these standards as overly conservative and argue that accurate wake
vortex prediction capabilities could allow for decreased separation thereby increasing airport
capacity in many weather conditions. Others argue that the limited capability of available
technology and the complexities of wake vortex propagation make it difficult to predict wake
turbulence or use such predictions to reduce arrival and departure spacing without
compromising safety.
Ground-Based Precision Navigation Aids. Both the House and Senate bills and
the conference bill contain provisions for the installation, operation, and maintenance of
ground-based precision navigational aids at mountain airports. The House and conference
bills specifically target implementing navigational aids that can also provide curved and
segmented guidance for noise abatement purposes. However, even with funding for precision
navigation systems, currently available ground-based navigational aids are not always viable
options at these airports due to terrain constraints on approach procedures. Accessibility to
many of these mountain airports has improved significantly over recent years and continues
to improve through the use of satellite-based navigation using the Global Positioning System
(GPS). However, this system is not yet capable of providing the needed precision for vertical
guidance. Consequently, the FAA has proposed a plan to develop approach procedures with
vertical guidance that will likely rely on a combination of satellite-based, ground-based, and
on-board navigational sources. Programs to increase precision navigational capabilities at
airports may need to provide sufficient flexibility to accommodate these anticipated changes
in precision approach procedures.
Gulf of Mexico. The House and Senate bills contain provisions for improving air
traffic services in the Gulf of Mexico. These provision will most directly benefit helicopter
operations that support the large offshore oil industry, but may also benefit smaller aircraft
operating below 18,000 feet over the gulf. The conference bill adopts the language in the
House bill that would fund the program with money from the Facilities and Equipment
account.
Enhancing the Safety and Security of the Aviation System
Security Enhancements at Airports.
With the passage of the Aviation and
Transportation Security Act (ATSA, P.L. 107-71) following the terrorist attacks of
September 11, 2001, the aviation security function was significantly expanded and passed
from the FAA to the newly formed Transportation Security Administration (TSA).
CRS-10

IB10121
09-26-03
Nonetheless, airport security projects, such as expanding and modifying passenger
checkpoints and installing explosive detection systems for checked baggage, have had a
significant impact on AIP funds allocated to airports. The Senate bill contains a provision
to establish an Aviation Security Capital Fund funded by aviation security fees to relieve
some of the demand on AIP funds from airport security projects. The Senate bill also
instructs the Department of Homeland Security to study the effectiveness of the aviation
security systems and redeploy aviation security assets based on the findings of this study.
An amendment to the House bill would require that airports and air carriers be reimbursed
for certain direct and indirect costs, such as the loss of retail space to security checkpoints,
associated with airport passenger screening.
Several airports, especially many of the large hub airports, currently face significant
challenges in funding projects to relocate explosive detection systems for checked baggage
temporarily housed in ticketing and check-in areas and develop in-line systems that
incorporate these machines into baggage handling facilities.
Some estimate that the
systemwide costs to complete installations of in-line baggage screening systems may be as
high as $3 billion. The Senate bill would allow DOT to establish an Aviation Security
Capital Fund derived from passenger and air carrier security service fees. The Senate bill
also proposes to authorize funding levels of $500 million per year for FY2004 through
FY2007 for the fund with: 40% to be made available to large hub airports; 20% to medium
hub airports; 15% to small hubs; and the remaining 25% to be distributed at the Secretary of
Transportation’s discretion. Under this plan, hub airports would have to pay for 25% and
non-hubs would have to pay for 10% of a security project’s costs using nonfederal funds.
Federal funds will be apportioned to airports using a formula based on the percentage of
enplanements that each airport experiences within its respective category. The conference
bill retains the Senate bill concept of an aviation security capital fund, but limits use of
security fees for this fund to $250 million of the $500 million total. However, the aviation
security fees designated to fund this program do not cover even the current operating budget
for aviation security. The FY2004 President’s budget indicates estimated receipts of $2.488
billion from aviation security fees that are now identified as offsetting collections for the
Transportation Security Administration’s proposed $4.812 billion budge. Of the TSA's
overall budget, $4.217 billion is designated for aviation security.
The roles and
responsibilities of FAA and TSA regarding aviation security projects at airports and funding
sources for these projects may require further clarification.
FAA Oversight of Operators and Maintenance Facilities. U.S. air carriers are
increasingly outsourcing maintenance to third-party repair stations. Outsourced maintenance
accounted for 47% of air carriers’ total maintenance costs in 2001.
However, FAA
inspections of domestic repair stations are only required once annually and oversight of many
repair stations located in foreign countries is delegated to inspectors from those foreign
countries. FAA is currently revising the regulations governing the 5,200 FAA-certified repair
stations, about 600 of which are located in foreign countries, to improve bookkeeping,
training, and quality control at these maintenance facilities. FAA currently employs 628
aviation inspectors to oversee these repair stations, however some in Congress have been
concerned over these staffing levels and the degree of FAA oversight at repair stations,
particularly at the 2,800 repair stations that perform maintenance on the air carrier fleet. The
Senate bill and the conference bill contain provisions that would require the FAA to develop
an action plan for providing adequate oversight of repair stations and ensure that repair
CRS-11

IB10121
09-26-03
stations in foreign countries are subject to the same level of oversight and quality control as
domestic repair stations.
Oversight of operations and maintenance practices at 10 of the largest passenger air
carriers in the United States is currently conducted under the Air Transportation Oversight
System (ATOS). As compared to more traditional inspection methods that rely heavily on
individual inspector expertise and focus on regulatory compliance issues, ATOS is a data-
driven program that relies on risk assessments and analysis to focus inspection activities on
particular areas where safety deficiencies might be expected at a specific air carrier. While
the program’s objectives and principals are generally viewed as a positive change for aviation
safety, reviews of the program have revealed that its effective implementation has been
hindered by a lack of standardization; a lack of adequate tools to help inspectors track safety
deficiencies and corrective actions; insufficient training; and inefficient allocation of human
resources. The Senate bill contains provisions for FAA to develop an action plan to correct
existing problems with the ATOS system and extend the program to oversight at more than
100 smaller air carriers in addition to the major passenger air carriers currently in the
program. These provisions would require the FAA to develop inspection checklists for FAA
inspectors and safety analysts; provide training in systems safety, risk analysis, and auditing
to FAA safety inspectors; ensure that inspectors are physically located where they are most
needed; and establish a strong central leadership for ATOS that will ensure that the system
is consistently implemented and expanded. Given current implementation difficulties with
the ATOS program, further expansion and refinement of the system may present significant
challenges.
Another concern is that FAA maintenance and operations inspectors may lack the
continuing training needed to keep up with current technologies. The House bill contains
a provision, adopted in the conference bill, directing the Comptroller General to study the
training of FAA aviation safety inspectors, expressing a sense that FAA inspectors should
get the most up-to-date initial and recurrent training on job-related aviation technologies.
Congress has also expressed concern over the adequacy of FAA’s inspector workforce,
particularly their ability to adequately oversee the aviation industry, and the increased use of
designees to carry out inspection duties. The House and conference bills also direct the
National Academy of Sciences to study the staffing methods FAA employs for determining
its air safety inspector workforce and suggest improved methods for assessing inspector
staffing needs.
Aviation Maintenance Training and Manuals. The House and conference bills
contain a provision directing the FAA to ensure that training standards and certification of
aviation mechanics are updated to more accurately reflect current technology and
maintenance practices. A recent GAO report found that the current FAA-developed aviation
maintenance curriculum is significantly outdated and is not adequate for training mechanics
to work on the advanced technology and materials commonly found in modern commercial
aircraft. The report recommended that FAA review and revise the curriculum.
Another provision of the House bill would require aircraft manufacturers to provide all
necessary maintenance manuals and related information to owners, operators, and repair
stations at no more that what it costs to prepare and distribute these documents. Neither the
Senate bill nor the Conference bill contain such a provision.
CRS-12

IB10121
09-26-03
Flight Attendant Certification. At present, federal regulations specify that cabin
crew are required on passenger flights using aircraft with 10 or more passenger seats. These
regulations identify training requirements; required duties; duty time and rest regulations;
airline drug testing program participation; and airline and FAA oversight, for flight
attendants. However, the FAA does not currently certify flight attendants or establish
specific training program and proficiency requirements for credentialing cabin crew. The
House and Senate bills as well as the conference bill contain provisions that would mandate
the certification of flight attendants. The objective of these measures is to develop industry
harmonization regarding flight attendant training and procedures. Opponents have argued
that this provision could result in a proliferation of unnecessary regulations governing the
certification of flight attendants that will increase the training and regulatory burden on
airlines without a clear benefit to aviation safety. On the other hand, proponents point out
that certification is required for other airline safety-critical personnel besides pilots, such as
aircraft dispatchers, and flight attendant certification would improve airline safety by
establishing industry-wide training and proficiency standards.
Cabin Air Quality. Both the House bill and the Senate bill contain provisions
directing the FAA to conduct a research program on airliner cabin air quality. The provision
in the House version specifically directs FAA to assess ozone levels, pesticide exposure, and
other contaminants to which passengers and crew are exposed on a representative number
of aircraft and flights. An amendment to the Senate bill further specifies the scope of the
study to include an assessment of compliance with existing regulations regarding ozone
levels, pesticide and contaminant exposure, and cabin pressure and altitude. The Senate
version would also establish a cabin air quality incident reporting system. The Conference
bill adopts the language of the Senate bill regarding cabin air quality.
Investing in the Future of Aviation
Much of the direction for FAA’s Research, Engineering, and Development (RD&E)
funding and initiatives for investing in aerospace and aviation safety research and technology
development contained in the Senate bill was adopted from the Second Century of Flight Act
(S. 788). The Senate bill identifies several initiatives to address future needs and challenges
in: aviation system safety and security; aviation system capabilities; aircraft noise, emissions,
and fuel consumption; and efforts to maintain leadership and progress in aviation and
aeronautics. Two separate House bills were under consideration. H.R. 2271, the Second
Century of Flight Act, proposes the same funding levels as the Senate bill and contains
similar language regarding identified research, engineering and development projects and
initiatives. The Federal Aviation Administration Research and Development Reauthorization
Act (H.R. 2734) was reported by the House Science Committee, but not considered on the
House Floor, and contains an alternative plan for FAA research, engineering and
development funding and identifies additional aviation research initiatives. Parts of these
bills appear to be incorporated in the Conference bill.
Coordination of Research and Development Efforts. The Senate bill and H.R.
2271 seek o establish an Office of Aerospace and Aviation Liaison within DOT, with an
annual budget of $2 million for FY2004 and FY2005, to coordinate aviation and aeronautics
research programs in an effort to develop more effective and directed research programs by
coordinating goals, priorities, and research activities across the Federal government and with
the aviation industry to facilitate technology transfer. The legislation also proposes to
CRS-13

IB10121
09-26-03
establish a National Air Traffic Management Development Office within FAA to develop
a next generation air traffic management system plan for the United States with input from
government and private sector stakeholders representing commercial aviation, general
aviation, and the space industry. Both bills would authorize $300 million over a six-year
period from FY2004 through FY2010 for this function. The conference bill instead adopts
language from H.R. 2734 that seeks to establish a Next Generation Air Transportation
System Joint Planning and Development Office with an annual budget of $10 million
through FY2010.
Aviation and Aerospace Education. The Senate bill, H.R. 2271, and the
conference bill also contain provisions for an initiative that would provide NASA and FAA-
sponsored merit-based grants, loans, and internship programs for higher education in fields
related to aerospace and aviation safety. The Senate bill provides for such sums as may be
necessary for NASA and FAA to establish and administer the program in FY2004 and
requires the agencies to jointly determine whether such a program should be extended for
additional years, while H.R. 2271 proposes funding levels of $5 million in 2004 and $7
million in 2005 but stipulates that at least 50% of the costs be derived from nonfederal
sources. Both bills also provide for a scholarship for service program. A separate provision
in the Senate bill would authorize such sums as may be necessary to carry out and expand
the Air Traffic Control Collegiate Training Initiative.
Identified Research Programs. In addition to those already mentioned, both the
Senate bill and H.R. 2271 identify airfield pavements and pavement standards as a research
area to be addressed by the FAA. The legislation also directs FAA to establish a center for
excellence in advanced materials, such as composites, for transport category aircraft. Both
bills propose to authorize $500,000 for FY2004 to develop the center. Finally, the legislation
directs FAA to conduct a study on reducing aircraft noise and emissions and increasing
aircraft fuel efficiency. H.R. 2734 seeks to establish an Airport Cooperative Research
Program to identify and fund research on airport issues not adequately addressed by existing
federal research programs, create a research program to study existing certification methods
and reduce the cost of new product certification; and conduct research assessing the impact
of new technologies and procedures on pilot and air traffic controller training.
The
conference bill adopts these proposed research areas as part of the overall FAA research,
engineering, and development program.
FAA Organizational Issues
Chief Operating Officer (COO). This position was created by AIR21. The COO
was supposed to allow the FAA to hire someone with experience operating high technology
integrated systems like air traffic control. The COO position, however, has never been filled,
which is a controversy in itself. Several candidates have apparently turned down the position
based on what many considered to be a very difficult job at a pay scale far below what might
be offered for a similar position in private industry. As defined in AIR21 there was a
concern that the job might sound more like a chief executive officer (CEO) position than a
COO position. This would have potentially caused concern about the relationship between
the COO and the FAA Administrator who by statute functions as the Agency's CEO.
Legislation proposed by the House and by the Senate, and now the Conference bill, would
seek to clarify this relationship and does so in their respective bills. The proposals are
CRS-14

IB10121
09-26-03
intended to make the COO position itself more desirable and make it more likely that this
position will be filled in the near future.
Air Traffic Control Privatization.
The House bill includes a provision that
prohibits privatization of the ATC system. During floor debate, the Senate bill was amended
to include a somewhat broader privatization prohibition. Privatization has often been
discussed as a possible way to increase the efficiency of the ATC system while at the same
time reducing its cost. The idea has been discussed in many contexts during the last decade,
but never acted upon by Congress. Recent action by the Bush Administration, removing
ATC from its definition of inherently governmental functions, was viewed by some as a
precursor to a privatization proposal, though no such proposal has been made.
In Conference a less stringent prohibition on privatization was adopted that precludes
transfer of ATC to a private or public entity prior to October 1, 2007. The provision,
however, allows the contract tower program to expand at certain levels as defined in the bill.
This provision was inserted without support from Minority Conference Committee Members
and represents an agreement reached by the Majority Members of the Conference and the
Bush Administration. This has become the most contentious item in the bill with some
Members vowing to try to defeat the Conference Report unless this provision is eliminated.
The Union representing air traffic controllers has been particularly critical of the provision
and has launched a wide ranging campaign to see that this provision is not adopted.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
January 9, 2003: The Future of the Airline Industry. Senate Committee on Commerce,
Science and Technology
February 11, 2003: FAA Reauthorization, Senate Committee on Commerce, Science and
Technology.
February 12, 2003:Reauthorization of the Federal Aviation Administration and the Aviation
Programs: Introduction. House Aviation Subcommittee.
February 25, 2003: Airport Improvement Program and Other Airport Financing Issues.
Senate Aviation Subcommittee.
March 5, 2003: FAA Reauthorization - Airport Financing. Senate Aviation Subcommittee
March 6, 2003: Reauthorization of the Federal Aviation Administration and the Aviation
Programs: Airports. House Aviation Subcommittee.
March 11, 2003: FAA Reauthorization - Air Service to Small Communities. Senate Aviation
Subcommittee
March 12, 2003: Reauthorization of the Federal Aviation Administration and the Aviation
Programs: Commercial Aviation. House Aviation Subcommittee.
March 27, 2003: Reauthorization of the Federal Aviation Administration and the Aviation
Programs: Testimony From the FAA Administrator and Witnesses Representing FAA
Employees. House Aviation Subcommittee.
April 9, 2003: Reauthorization of the Federal Aviation Administration and the Aviation
Programs: General Aviation. House Aviation Subcommittee.
April 10, 2003: FAA Reauthorization. Senate Committee on Commerce, Science and
Technology
CRS-15

IB10121
09-26-03
FOR ADDITIONAL READING
CRS Issue Brief IB10032. Transportation Issues in the 108th Congress.
CRS Issue Brief IB10026. Airport Improvement Program.
CRS Report RS21321. Aviation Taxes and Fees: Major Issues.
CRS Report RS20914. Aviation Congestion: Proposed Non-Air Traffic Control Remedies.
CRS-16