Airport Funding FAA Airport Improvement Program (AIP)
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1 Airport Funding FAA Airport Improvement Program (AIP) Presented to: Texas Aviation Conference By: Mike Nicely, Manager Texas ADO Date: May 15, 2013
2 Discussion Topics Enabling Legislation Authorization & Appropriation AIP Funding Breakdown AIP Apportionment AIP Apportionment/Discretionary AIP Discretionary AIP Distribution National AIP Distribution - Texas 2
3 Legislation Airport and Airway Revenue Act of 1970 Established Airport and Airway Trust Fund Taxpayer Relief Act of 1997 Established current tax structure for Trust Fund revenue Domestic Passenger Ticket Tax (7.5% of ticket price) Domestic Passenger Flight Segment ($3 per segment for 2002 then indexed to CPI) Special Rule for Flights Between the continental US and Alaska or Hawaii ($6 departure tax, indexed to CPI from 1999 plus portion of passenger ticket tax) Passenger Ticket Tax at Rural Airports (7.5% of ticket price) International Departure and Arrival Taxes ($12 per person departure plus $12 per person arrival tax indexed to CPI from 1999) Frequent Flyer Tax (7.5% of frequent flyer award value) Domestic Freight and Mail (6.25% of shipment cost) Fuel Tax (Commercial Fuel (4.3 cents/gal), GA Fuel (19.3 cents/gal AVGAS, 21.8 cents/gal Jet Fuel) 3
4 Legislation Trust Fund Annual Revenue - $10-12 B. Trust Fund Funds: FAA Operation (funded by General Fund & Trust Fund) FAA Facilities and Equipment FAA Research, Engineering and Development Grants-in-Aid for Airports Airport Improvement Program (AIP) DOT Essential Air Services 4
5 Authorization & Appropriation for AIP Authorization FAA Modernization and Reform Act of 2012 Four Years AIP - $3.35 B Appropriation by Congress Annually Full Year Continuing Resolution Sept. 30, 2013 AIP at FY 2012 level - $3.35 B. 5
6 AIP Funding Breakdown Three types of funding: 60% of AIP 1. Apportionments (formula driven to AIP) 2. Discretionary (set-asides & minimums) 3. Apportionment/Discretionary Hybrid 40% of AIP 6
7 AIP Apportionments Passenger Entitlements Formula based on # of annual passenger boardings $1M min and $22M max Cargo Entitlements 3.5% of AIP (100 million lbs. landed cargo rate) 8% max/airport State Funding State Apportionment (20% of AIP) Based on state population and land mass Non-Primary Entitlement (lesser of 1/5 of 5-year NPIAS development or $150K) Alaskan Supplemental 7
8 AIP Apportionment/Discretionary Hybrid Small Airport Fund Made up of 87.5% of returned passenger entitlements from large and medium hub airports $3 PFC = 50% turn back $4/$4.5 PFC = 75% turn back Small Hub airports get 1/7 Non Hub airports get 4/7 General Aviation get 2/7 8
9 AIP Discretionary Set-Asides Noise (35% of amount remaining after apportionments) Reliever (0.66% of amount remaining after apportionments) MAP (4% of amount remaining after apportionments) Minimums Capacity/Safety/Security/Noise (C/S/S/N) 75% of remaining after set-asides (+) 2/3 of 12.5% returned entitlements Pure Discretionary 25% of remaining after set-asides (+) 1/3 of 12.5% returned entitlements 9
10 AIP Distribution - National Allotments to FAA Airports Division Regional Offices based on THREE Factors # of airports in region (80% weighting factor) Region activity levels (10% weighting factor) Airports Capital Improvement Plan (10% weighting factor) Regions award grants to airports based on priority development needs contained in 3- year Airports Capital Improvement Plan. 10
11 AIP Distribution Texas (FY 2012) Passenger Entitlements $63 million 26 airports Cargo Entitlements $6.5 million 9 airports State Funding $17.2 million State Apportionment $26.6 million Non-Primary Entitlement Discretionary $104 million 11
12 Challenges of a Thank you! Growing Aviation System Questions? Mike Nicely Manager, Texas Airports Development Office (817) Presentation mike.nicely@faa.gov to: Name: Date:
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