Washington Update: FAA Reauthorization, ATC Reform, 1500 Hour Rule, and $1 Billion in Omnibus Funding

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1 Session Ten: Washington Update: FAA Reauthorization, ATC Reform, 1500 Hour Rule, and $1 Billion 2018 GAA Annual Conference & Expo Jekyll Island, Ga Back to the Beach: For a Low Country Luau in Omnibus Funding

2 National Association of State Aviation Officials John Shea Interim President and CEO (202)

3 Introduction After a four-plus-year process that involved six short-term extensions, several versions of the bill, hundreds of meetings on Capitol Hill, dozens of hearings, and one of the most contentious debates surrounding the future of the air traffic control organization, H.R.302 was signed into law October 5, Ultimately that process led to bipartisan legislation that passed the House by a vote and the Senate by 93-6 and has broad support from most corners of the industry. The final legislation authorizes a total of $96.7 billion in funding for federal aviation programs over five years (FY ). This is the longest funding authorization period for Federal Aviation Administration programs since the 1982 act. AIP is authorized at $3.35 billion each fiscal year through 2023, and a new supplemental grant program was created.

4 Supplemental Funding in FAA Bill Overview: The measure authorizes $1.02 billion for that program in fiscal year Funding then will rise slightly each year after that, to a maximum of $1.11 billion in fiscal At least 50% of the annual allocations will go to small hub and non-hub airports. Larger airports are eligible for the other portion of the new program's annual funding. The new grants are subject to annual appropriations Considerations: Congressional appropriators already launched a similar program, totaling $1 billion for such grants in fiscal 2018, with a priority placed on applications from small and rural airports. One difference is that under the 2018 appropriation measure, the new grants carry a 100% federal share; the authorization bill caps the federal share at 80% Lawmakers drew on a congressional budget agreement that allowed for an additional $10 billion in overall infrastructure spending in 2018 and in After 2019, any extra AIP money from the general fund is dependent on the negotiation of a future deal increasing the BCA caps.

5 Additional Funding Authorizations Essential Air Service (EAS) H.R.302 authorizes increased discretionary funding for each fiscal year from $150 million in FY18 to $172 million in FY2023. It also requires a GAO study on the effects of laws passed since 2010 related to the Essential Air Service (EAS) program. The Transportation Department would be allowed to waive several EAS eligibility rules, and would be required to waive subsidy-per-passenger caps in some circumstances. Small Community Air Service Development Program (SCASDP) H.R.302 authorizes $10 million annually for SCASDP from fiscal years 2018 through million of the $10 million authorized annually is for a newly-created Regional Air Transportation Pilot Program. The legislation allows communities to apply for SCASDP grants for the same project once per 10 years. Currently, each project can only participate in the program once. As many as 40 communities per year could receive grants.

6 Passenger Facility Charge No Increase to PFC Included H.R. 302 did not increase the PFC that airports can levy on enplaning passengers, which has been capped at $4.50 per passenger per segment since Notes: The original House-passed bill contained no PFC increase and the bill reported from committee in the Senate did not include one, either. The FY 2018 THUD appropriations bill in the Senate did originally increase the PFCs allow the airport of origin to increase PFCs but that was ultimately dropped. PFC Reforms Included Airports did get a provision (sec. 121) making it easier to levy PFCs of $4.00 or $4.50 without the extensive justification process currently required. Hub airports will now have access to the alternative PFC approval process pilot program. The bill also requires a study of future airport funding needs that will, presumably, pave the way for a PFC increase in the next authorization bill in 2023.

7 Non-Primary Entitlement (NPE) Reform Non-Block Grant States Expired NPE funds in non-block grants will go back to the federal discretionary account, as they have before. However, H.R. 302 ensures that expired NPE dollars can only be used at GA airports. Notes: NPE grants are available for non-primary airports at up to $150,000 per year. Non-primary airports can bank/carryover these funds for up to four years to accumulate $600,000. Carryover and expired funds are sent back to the federal discretionary account, where they are often used at non-ga airports. This bill protects expired NPE dollars. Block Grant States Expired NPE in block grant states will not be sent back to the federal discretionary account. The expired funds will remain in state and can be used as apportionment. Notes: Keeps these funds in state as originally intended has been a top priority for NASAO.

8 Empowering States State Block Grant Program Expansion The cap on the State Block Grant program, which allows states to assume responsibility for administering AIP grants at airports was increased to 20 states, from 10. UAS Integration Pilot Program (IPP) The bill codifies the existing UAS IPP created by the DOT last year. The pilot program intends to accelerate the safe integration of unmanned aircraft and address various policy and technical questions of stakeholders, including state and local governments, related to the integration of unmanned aircraft. Modified Pavement Specifications The bill requires the Secretary to allow the use of a State s highway specifications for airfield pavement construction/improvement at nonprimary airports serving aircraft that do not exceed 60,000 pounds. Notes: The current specifications are not warranted for lighter aircraft and have created challenges related to procurement of materials and qualified vendors. This new flexibility will more easily allow vendors to provide pavement as issues related to the limited availability of airfield pavement materials will be resolved.

9 UAS Provisions Special Rule for Model Aircraft The bill redefines the rules for the operation of recreational drones by repealing section 336 of the 2012 FAA Reauthorization Act, which had severely limited the FAA s authority to regulate recreational drones. The new rules for operation would require: Passage of an aeronautical safety and knowledge test Registration and marking of the recreational drone, Operating under a community-based organization s set of safety guidelines that are developed in coordination with the FAA. Remote Identification and Tracking The bill requires the FAA to establish a pilot program to begin more thoroughly utilizing remote detection and identification of drones. Counter-UAS Authority Division H of the bill provides DHS and DOJ the authority to destroy or overtake a drone that has violated protected airspace or is otherwise posing a threat to the safety or security of the United States.

10 Other Significant Reforms Reforms and continues the critically important Federal Contract Tower Program to enable new towers to enter the program, and updates the FAA s cost benefit analysis for current contract towers. Creates a remote air traffic control tower pilot program, deploying new advanced technologies in a way that will lower the cost of air traffic control services. Strengthens consumer protection laws, and maintains the DOT s oversight of aviation consumer issues. Streamlines and reforms the FAA certification and regulatory processes Requires the FAA to undertake several new studies exploring the impact to communities of airplane noise, the economic and health impacts on individuals as well as methods for alleviating airplane noise. Establishes an Office of Spaceports within the Office of Commercial Space Transportation to support licensing activities for launch sites, improve infrastructure at public launch sites, and promote the space launch industry. Authorizes a 5-year pilot program that will provide $5 million in annual grants to business, schools and governmental entities that partner to pursue creative ways to recruit and retain new aviation maintenance technicians.

11 National Association of State Aviation Officials John Shea Interim President and CEO (202)