Legislation is moving in the House to extend Federal Aviation Administration programs, including a hike in airport grants and a boost for passenger fees that fund infrastructure projects. But the four-year bill, which the Transportation and Infrastructure Committee approved on June 28, also added an amendment to reopen the labor contract for federal air traffic controllers. That provision has sparked a veto threat from the Bush administration, complicating lawmakers' quest to get an aviation bill enacted by Sept. 30, when FAA programs are due to expire.
For the construction industry, the main focus is the House committee bill's airport infrastructure funding. The measure authorizes $15.8 billion over four years for FAA's Airport Improvement Program, which provides grants to help build runways, taxiways and other infrastructure. The bill's AIP allocations would begin at $3.8 billion in fiscal 2008, then rise by $100 million a year, reaching $4.1 billion in 2011. Funds would be subject to annual appropriations. AIP's appropriation for 2007 is $3.5 billion. The House bill's AIP figures are likely to be the ones in the final bill, whenever one emerges, because they're the same as those contained in the aviation bill that the Senate Commerce, Science and Transportation Committee cleared on May 16. Brian Deery, senior director of the Associated General Contractors' highway and transportation division, says, "It's not a major boost, but it is a steady increase in the program over the next four years."
The House committee's measure also would raise the cap on passenger facility charges (PFCs) that airports levy, from the current $4.50 per flight segment to $7. At the current PFC level, FAA estimates the fees collected will total $2.68 billion, with the proceeds going to a variety of airport projects. Committee Chairman James Oberstar (D-Minn.) says that if all airports that now have $4 or $4.50 fees charge $7, FAA projects would produce about $1.1 billion more per year for airport projects.
The House transportation committee's recommended PFC hike represents a 56% increase over the current limit. But Debby McElroy, Airports Council International-North America senior vice president for government affairs, says that it's important that the House panel "recognized the fact that the purchasing power of the existing PFC has been devastated by construction cost inflation." In inflation-adjusted terms, at $7, "this is going to just about keep us whole," she says.
The Senate commerce committee's bill keeps the PFC cap at $4.50 under a test program, except at six to-be-selected airports.
Observers now will be watching what House and Senate tax-writing committees decide about aviation taxes. Oberstar says he will recommend to the House Ways and Means panel that the tax rate for jet fuel used by corporate jets and other general aviation craft be boosted from 21.8� per gallon now to 30.7� per gallon, a 41% hike. Oberstar also is recommending that aviation gasoline taxes, used by other types of small planes, be raised from 19.3� per gallon to 24.1�, a 25% increase.
In the Senate, the Finance Committee has yet to act on its aviation tax measure. The commerce committee is recommending that Finance phase out the 4.3�-per-gallon fuel tax for commercial airlines. Fuel taxes are one of the revenue sources for the Airport and Airway Trust Fund, which finances FAA's AIP grants and much of the rest of the agency's budget.
But there's a cloud over the House transportation committee's bill. By a 53-16 vote, the panel added an amendment that would reopen a 1998 contract between the FAA and the National Air Traffic Controllers Association. That amendment "is a showstopper," says Rep. John Mica (Fla.), the panel's ranking Republican, who voted against it.
Soon after the panel approved the bill, an official in the hearing room, presumably from the U.S. Dept. of Transportation, handed out to reporters copies of a prepared statement from Transportation Secretary Mary E. Peters, which said that "the President's senior advisers would recommend that he veto any reauthorization proposal that includes language to alter the existing controller contract or reopen contract negotiations."