FAA Reauthorization Issues & Impacts on Airports

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1 Issues & Impacts on Airports Presentation to Mid America Association of State Transportation Officials July 21, 2011 Presented by Greta J. Hawvermale Sr. Director of Engineering & Environmental Matters

2 FAA Reauthorization What s the fuss? Role of the Airport - Transportation - Economic Engine - Employer

3 The Airport as an Asset Safety Expansion Maintenance

4 History of FAA Reauthorization Federal Aviation Administration s (FAA) authorization expired on Sept. 30, extensions since that date (more than 3 years on continuing resolutions). Current extension provides FAA funding through July 22, 2011(22 day extension). U.S. Senate approved 21 st extension on July 20, 2011.

5 Reauthorization Issues Essential Air Service Program National Mediation Board Rules Passenger Facility Charges (PFC) Reagan National Airport Slots Airport Improvement Funding

6 Congressional Bills In February 2011, the U.S. Senate passed FAA Air Transportation and Modernization and Safety Improvement Act (S. 223), a $34.5 billion, two year FAA reauthorization bill. April 2011, the U.S. House passed FAA Reauthorization and Reform Act of 2011 (H.R. 658), a $59.7 billion, four year FAA reauthorization bill.

7 Congressional Positions House Bill (H.R. 658) Senate Bill (S.223) No PFC Increase. No PFC Increase. PFC pilot program to allow up to 5 airports to use PFCs to fund ground access projects that provide airport access. PFC pilot program to allow up to 6 airports allows airports to have unlimited PFC cap but requires selfcollection. Streamlines PFC consultation process with the airlines and the public notice and comment period for the local community.

8 House Bill (H.R. 658) AIP Authorization: Congressional Positions (con t) Senate Bill (S.223) AIP Authorization: $3.1 billion in FY 2011 $3.0 billion in FY FY 2014 Formula Changes: No Change. Requires 90% match for state block grants and small hubs. $4.0 billion in FY 2010 $4.1 billion in FY 2011 Formula Changes: Sec. 207 requires 95% match for state block grants and small airports. Sec. 208(i) allows airports whose enplanement numbers dropped below 10,000 to continue to be eligible to receive the minimum entitlement.

9 House Bill (H.R. 658) Congressional Positions (con t) Senate Bill (S.223) Provides liability limitations for airports and responsible parties that collect safety management system (SMS) data. No SMS language. Protects data collected for SMS through FY 2014.

10 House Bill (H.R. 658) Congressional Positions (con t) Sunsets the Essential Air Service Program by 2014, except for Alaska and Hawaii. Senate Bill (S.223) Authorizes $150 million for the Essential Air Service Program. Limits eligibility to airports more than 90 miles from a large or medium hub and that average more than 10 enplanements per day.

11 House Bill (H.R. 658) Congressional Positions (con t) Eliminates separate funding authorization for the Small Community Air Service Development Program, funds program through overflight fees. Senate Bill (S.223) Extends Authorization of the Small Community Air Service Development Program of $35 million per year for FY 2010 and 2011.

12 House Bill (H.R. 658) Congressional Positions (con t) 10 new beyond perimeter slots at Reagan National Airport (DCA) to be offset by a reduction of 10 within perimeter slots. Priority for new slots given to new entrant and limited incumbent air carriers. Senate Bill (S.223) 24 new beyond perimeter slots 10 would be designated for airlines with limited or no service at DCA, remaining slots would go to incumbent airlines. Requires DOT study on whether there are adverse effects of additional slots if study finds no negative effects DOT could authorize up to 8 additional slots.

13 House Bill (H.R. 658) Keeps jet fuel taxes the same. Congressional Positions (con t) Senate Bill (S.223) Includes a 14 cent increase on jet fuel. Assesses jet fuel tax on fractional operations.

14 Airport Funding Impacts Currently only 85% of entitlement funds have been appropriated (entitlement funds are based on size and/or activity levels at an airport). Although FAA anticipates it will reach 100% entitlement funds in future short-term resolutions through end of FAA fiscal year (September 30 th ). Emphasis on funding entitlements at expense of discretionary program.

15 IAA Airport System The Indianapolis Airport Authority (IAA) operates: Indianapolis International Airport, IND, (medium hub, and 6 th largest US cargo airport) and five non-primary airports (general aviation).

16 Impact to IAA at Indianapolis International FAA Reauthorization Total entitlement dollars reduced approximately $640,000 from $6.1M (FY 2010) to $5.46M (FY 2011, if entitlements reach 100%). IAA is on a cash only (pay as you go) program so reduction in funding results in reduction in projects. Three projects to be funded with entitlement dollars to be deferred due to lack of grant funds. This deferral will likely have domino effect of pushing back other projects in future years. Deferred projects include pavement management plan and design of parallel taxiway rehabilitation. This has the potential to impact management of airfield infrastructure.

17 Impact to IAA at Indianapolis International (con t) Requested increase in discretionary dollars for a project on the candidate list, declined as no increases are being funded (requested increase $440,000). FAA to plan for reduced levels in future years, anticipated to result in additional delayed implementation of infrastructure projects in future years.

18 Impact to IAA at Non-Primary Airports Programmed discretionary grants for fencing projects at two airports, not expected due being too low on candidate list with reduced funding. - At Hendricks County Airport/Gordon Graham Field lost $350,000 or 45% of project grant funding. - At Metropolitan Airport lost $360,000 or 55% of project grant funding. Results in projects being divided into reduced size phases and extending construction over additional years, which may delay other future projects. Fencing project to increase security and wildlife control will take longer to implement and experience benefit of fence.

19 Impact to IAA at Non-Primary Airports (con t) A pavement rehabilitation project at Eagle Creek Airpark programmed with discretionary grants will have discretionary grant funds replaced with a state apportionment grant ($140,000). Good news for IAA, but it means another Indiana airport will have reduced funding. Other IAA non-primary airports had projects planned with all entitlement dollars, but have been waiting for sufficient funds to be appropriated to request a grant.

20 Continuing Challenges U.S. Senate approved 21 st extension, U.S. House action still needed. FAA to reprogram future years also at reduced levels, increasing funding challenges to maintain infrastructure. Inefficiencies and increased costs introduced with additional phasing of projects. Grant funds becoming available late in the year, reduces length of available construction season. Scheduling for AIP grant money is already difficult and with the FAA operating in its current state, only adds to uncertainty in the funding process.