Vision 100: Historical Review of the Century of Aviation Reauthorization Act (P.L. 108-176)

Order Code RL32498

CRS Report for Congress

Received through the CRS Web

Vision 100: Historical Review of the Century of

Aviation Reauthorization Act (P.L. 108-176)

July 28, 2004

Bartholomew Elias, John Fischer, and Robert Kirk

Specialists in Transportation

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Vision 100: Historical Review of the Century of

Aviation Reauthorization Act (P.L. 108-176)

Summary

The Wendell H. Ford Aviation Investment and Reform Act for the 21st

Century (FAIR21 or AIR21; P.L. 106-181), which provided authorization for the

Federal Aviation Administration (FAA) and related aviation programs, expired at the

end of FY2003. Congressional debate on a new reauthorization bill took place

during the 1st Session of the 108th Congress leading, finally, to a new reauthorization

that extends FAA programs through FY2007.

A number of issues were considered during the reauthorization debate. The

condition of the airline industry, while not directly addressed in the bills under

consideration, had an impact on the debate because the aviation industry’s

recessionary environment has constrained the trust fund revenues that support most

of the FAA budget. Increasing capacity and reducing future congestion and delay,

as well as proposals concerning air traffic modernization were issues.

“Environmental streamlining” was also a major element of the reauthorization

debate, involving proposals to expedite environmental reviews potentially affecting

the completion of airport capacity capital projects. Funding security enhancements

at airports without depleting the Airport and Airway Trust Fund of funds needed to

support the national system’s other needs was also a significant issue in the debate.

Subsidizing air service to isolated communities is a perennial issue in FAA

reauthorization as are other issues such as federal aid for airport noise mitigation,

aviation safety, and air traffic control privatization.

On July 25, 2003, Vision 100-Century of Aviation Reauthorization Act (H.Rept.

108-240) was reported out of conference. The conference report specified $59.2

billion over four years for FAA activities. However, a few provisions of the original

conference report were considered controversial. Most notable of these was a

provision that would have prevented privatization of certain air traffic control

functions, but would have allowed privatization of certain airport towers. On

October 28, 2003, the House recommitted the bill to the conference to address this

controversy, and the following day a new conference report (H.Rept. 108-334),

almost identical to the first but without the air traffic control privatization protection

language, was filed. That report passed the House on October 30, 2003; passed the

Senate on November 21, 2003; and was signed into law on December 12, 2003. The

new law, Vision 100-Century of Aviation Reauthorization Act (Vision 100; P.L. 108176), reauthorizes FAA aviation programs for fiscal years 2004-2007. The bill also

includes numerous provisions to improve aviation security.

This report will not be updated.

Contents

State of the Aviation Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Competition and Delay Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Reagan National Airport Slots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

War Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Improving Air Service to Isolated Communities . . . . . . . . . . . . . . . . . . 5

Airport and Airway Trust Fund (Aviation Trust Fund) Issues . . . . . . . . . . . 7

Airport Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Reauthorization Proposals and Issues . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Apportionment and Eligibility Changes . . . . . . . . . . . . . . . . . . . . . . . . 8

Discretionary Fund Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Airport Noise Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Passenger Facility Charge Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Federal Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Airport Privatization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Airport Security Project Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Runway Safety Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Environmental Streamlining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Airway Facilities Improvements and Air Traffic Modernization . . . . . . . . 10

Cost Sharing for Air Traffic Modernization Projects . . . . . . . . . . . . . 10

Wake Vortex Advisory System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Ground-Based Precision Navigation Aids . . . . . . . . . . . . . . . . . . . . . . 11

Gulf of Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Enhancing the Safety and Security of the Aviation System . . . . . . . . . . . . . 11

Security Enhancements at Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Other Aviation Security Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

FAA Oversight of Operators and Maintenance Facilities . . . . . . . . . . 13

Flight Attendant Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Cabin Air Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Investing in the Future of Aviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Coordination of Research and Development Efforts . . . . . . . . . . . . . . 15

Aviation and Aerospace Education . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Identified Research Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

FAA Organizational Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Chief Operating Officer (COO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Air Traffic Control Privatization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

List of Tables

Table 1. Reauthorization Funding Levels by Program . . . . . . . . . . . . . . . . . . . . . 2

Vision 100: Historical Review of the Century

of Aviation Reauthorization Act (P.L.

108-176)

On June 11, 2003, H.R. 2115, Flight 100 — Century of Aviation

Reauthorization Act, was passed by the House of Representatives. 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. On July 25, 2003, Vision 100 - Century of Aviation Reauthorization Act (H.Rept. 108-240) was reported out of

conference. On October 28, 2003, the House passed H.Res. 377 recommitting the

conference report back to the conference. On October 29, 2003, a new conference

report (H.Rept. 108-334) was filed and was agreed to by the House on October 30,

2003. The new conference report (H.Rept. 108-334) was agreed to by the Senate on

November 21, 2003 and signed into law by the President on December 12, 2003 (P.L.

108-176).

The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

(FAIR21 or AIR21; P.L. 106-181), which provided authorization for the Federal

Aviation Administration (FAA) and related aviation programs, expired at the end of

FY2003. Consequently, the 1st Session of the 108th Congress 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) proposed a threeyear 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 four 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 three 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, the

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.

Vision 100 (P.L. 108-176) adopts the Senate plan for airport improvements

funding levels starting at $3.4 billion in 2004 and providing $100 million annual

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increases thereafter. Vision 100 also provides increased authorization levels for

facilities and equipment in 2004, and significantly higher authorization levels for

research, engineering, and development. Vision 100 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 enacted authorization levels is provided in Table 1.

This report discusses major elements of the legislation and significant issues

considered during debate over FAA reauthorization including:

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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 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

FY2004

FY2005

FY2006

FY2007

Airport Improvement Program

(AIP)

Admin:

Senate:

House:

Enacted:

3.400

3.400

3.400

3.400

3.400

3.500

3.600

3.500

3.400

3.600

3.800

3.600

3.400

—

4.000

3.700

Facilities and Equipment

(F&E)

Admin:

Senate:

House:

Enacted:

2.916

2.916

2.938

3.138

2.971

2.971

2.993

2.993

3.031

3.030

3.053

3.053

3.098

—

3.110

3.110

FAA Operations and

Maintenance (O&M)

Admin:

Senate:

House:

Enacted:

7.591

7.591

7.591

7.591

7.732

7.732

7.732

7.732

7.889

7.889

7.889

7.889

8.064

—

8.064

8.064

Research, Engineering, and

Development (RE&D)

Admin:

Senate:

House*:

Enacted:

0.100

0.289

0.190

0.346

0.102

0.304

0.207

0.356

0.104

0.317

0.228

0.352

0.107

—

—

0.356

TOTAL

Admin:

Senate:

House**

Enacted:

14.007

14.196

13.929

14.475

14.205

14.507

14.325

14.581

14.423

14.836

14.742

14.894

14.669

—

15.174

15.230

* House RE&D provisions introduced in H.R. 2734.

** House totals do not include RE&D provisions in H.R. 2734.

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State of the Aviation Industry

Reauthorization of the FAA took place against the backdrop of the remaining

effects of the war in Iraq, memory of the recent outbreak of Severe Acute Respiratory

Syndrome (SARS), and lingering concerns about terrorism dating back to September

11. Almost all facets of the aviation industry were operating in a recessionary

environment, even though the official recession as defined by the Treasury had ended

before final passage of Vision -100.. 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. In 2003 most

airlines, with the notable exceptions of Southwest and some other newly emergent

air carriers, experienced significant losses. Even with traffic beginning to return,

profitability was still viewed as being a year or more away. The economic difficulty

of the situation was not limited to the airlines, but extended across a 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 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 was “stalled” in 2003 it was believed that this

situation was temporary. The same FAA forecast mentioned above expected that

industry growth would resume before the end of 2003, as it appears to have been

doing, but 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 2003 Senate bill addressed 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 allowed the Secretary of

Transportation to call for meetings between the FAA and airlines if it was deemed

necessary to consider flight reductions/rescheduling at an airport. These meetings are

to be held using procedures developed by the Secretary. In 2003, specific airport

flight delays were 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

required that hub airports denying airline requests for facilities 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 had provisions that allowed for scheduling meetings during

“capacity reduction events.” The House plan created a demonstration or pilot

program that allowed “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

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of Transportation can offer limited immunity from antitrust law. The program was

to run for two years, but could be extended for an additional two years and expanded

to include up to seven additional airports.

All of the provisions discussed above were part of the conference bill, although

some aspects of each proposal were modified. For example, the pilot program only

allowed 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 could

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 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

increased 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 owned by US

Airways.

Vision 100 essentially adopts the House provisions. The act, 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. DOT has now allocated

these new slots to several airlines.

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

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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 after September 11, Congress has

afforded the airline industry extended coverage under the war risk program. Funding

for this program 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 August 2004, unless extended by the President until the end

of 2004.

As proposed in the Senate bill, authorization of the war risk program would be

extended until the end of 2007. 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. Vision 100 is similar to the Senate version of the bill, but extends

program authorization 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) Program were designed to address the difficulties in obtaining and

maintaining air service in small, isolated communities where access to the national

air transportation system is limited. Vision 100 reauthorizes these programs and

restructures the EAS program. Additionally, Vision 100 establishes 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 EAS program received $102 million in appropriations for FY2004 (see P.L.

108-199). Vision 100 authorizes a total of $127 million annually through FY2007,

of which not more than $12 million can be applied toward the new marketing

incentive program included from the Senate bill. Several modifications were

included in Vision 100 to increase program flexibility and transportation options for

linking EAS communities to the national aviation network.

The new marketing incentive program allows EAS communities to obtain grants

of up to $50,000 for implementing marketing plans to increase ridership.

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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. Vison 100

provides up to $12 million each year to fund this initiative. Vision 100 also includes

a community flexibility pilot program 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 times the

subsidy paid for EAS service in the most recent 12-month period.

Vision 100 also contains additional provisions for a community and regional

choice program as an alternate to EAS. The community and regional choice program

provides 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.

A provision in Vision 100 requires that DOT establish a consistent standard for

calculating milage. It also requires that DOT consult with state officials when

calculating the most commonly used highway distance to a hub airport for the

purpose of determining EAS eligibility.

Additionally, a somewhat controversial provision contained in Vision 100

directs the DOT to establish a local participation pilot program under which up to 10

EAS communities, no more than 1 per state, located within 100 miles of a large hub,

will be required to pay 10% of the EAS subsidy with non-federal funds for a period

of four years. However, a provision in the FY2004 consolidated appropriations

measure (P.L. 108-199) prevents the use of any FY2004 appropriations to implement

this program.

Small Community Air Service Development Program. Vision 100

reauthorizes the Small Community Air Service Development (SCASD) Program and

removes the previous designation of the program as a ‘pilot’ program. Vision 100

authorizes $35 million per year for the 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. Program

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. While the House version

sought to remove the per state limit on grants, Vision 100 sets a limit on grant

recipients to 4 per state each fiscal year.

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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 Vison 100.

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. Vision 100 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 act 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 are generally not eligible for AIP funding.

AIP money cannot usually be used for airport operational expenses or bond

repayments. AIP funds are distributed either as formula grants or as discretionary

grants. Small airports are much more dependent on AIP grants than large and

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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.

Reauthorization Proposals and Issues. Vision 100 included provisions

directed toward facilitating capacity enhancing projects and redirected some funding

toward smaller airports. Compared with the changes in AIR21, the changes to AIP

under Vision 100 are of a perfecting nature rather than major changes. As set forth

in Table 1, the funding increases were also modest, growing $100 million annually

from a FY2004 base of $3.4 billion to a high of $3.7 billion for FY2007.

Apportionment and Eligibility Changes. Vision 100 included provisions

that protect small airports from having their apportionments reduced in FY2004

because of reduced traffic levels. The Cargo airports formula percentage was raised

to 3.5%. Non primary airports are now 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. Also, AIP grants at small

airports may now be used to pay interest on bonds used to finance an airport project.

Purchase and retrofitting of low emission vehicles at airports, as well as other air

quality projects, were made eligible for AIP grants.

Discretionary Fund Changes. Vision 100 increased the discretionary set

aside for noise projects from 34% to 35%. The Military Airport Program airport

maximum funding was increased from $7 million to $10 million for FY2004FY2005.

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.

Vision 100, as mentioned earlier, raised the noise AIP set-aside to 35%. The act also

included 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 has been required in the past.

Passenger Facility Charge Issues. Vision 100 included provisions to

streamline PFC public notice requirements as well as ending the “significant

contribution” project requirement for 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 that provide scheduled service at

the airport. The act established a pilot program to test alternative procedures for

authorizing small airports to impose PFCs. It also made conversion of ground support

equipment to low emission technology eligible for PFC funds. Vision 100 also

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empowered 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.

Federal Share. Vision 100 raised the federal share from 90% to 95% for

airports smaller than large and medium hub and airports in states participating in the

state block grant program. It also raised from 40% to 70% the share for airports

participating in the pilot privatization program (see below) for private ownership of

airports.

Airport Privatization. Vision 100 amends the approval conditions for the

Airport Privatization Pilot Program. This program allows the Secretary of

Transportation to approve applications from up to five airport sponsors that wish to

sell or lease a general aviation airport or lease any other airport. The selected airports

would receive exemptions from certain provisions of Title 49 concerning revenues,

grants, and compensation, but are also required to meet the terms and requirements

set forth in section 47134.

Under Vision 100, airports selected for the pilot program must meet new

approval criteria concerning carriers at the airport. For primary airports, privatization

must be approved by 65% of the scheduled carriers at the airport and by scheduled

or non-scheduled carriers whose aircraft landing at the airport had at least 65% of the

total landed weight at the airport. For non-primary airports the Secretary of

Transportation must consult with 65% of owners of aircraft based at that airport. Air

carrier non-approval has to be filed within 60 days or approval will be granted..

This program involves privatizing airport facilities and operations normally

under the control of an airport sponsor. It does not allow for privatization of air

traffic control or security operations.

Airport Security Project Eligibility. Vision 100 repealed the authority to

use AIP or PFC funds for airport security purposes. These costs are to be paid for

from an Aviation Security Capital Fund (see “Security Enhancements at Airports”,

below).

Runway Safety Areas. The House bill contained a provision that would

have made 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. Vision 100 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. 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.

Environmental Streamlining. Vision 100 included 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 act

designated the DOT as the lead agency in the project review process and directed the

Secretary to develop a coordinated process for major airport capacity projects that

CRS-10

will assure simultaneous review by all government agencies. Much from the House

bill, which included the most extensive environmental streamlining provisions, was

included in Vision 100. The act provided 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. Vision 100 authorizes the expenditure of such

sums as may be necessary to implement a pilot program to test the cost effectiveness

and feasibility of long-term financing of modernization of major air traffic control

systems.

Cost Sharing for Air Traffic Modernization Projects. Vision 100 also

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 program, 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 authorized by Vision

100, federal funds for a project will 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 new program, however, allows 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.

Wake Vortex Advisory System. Vision 100 authorizes the expenditure of

such sums as may be necessary for the development and assessment of wake vortex

advisory systems. Vision 100 also directs the National Research Council to conduct

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an assessment of FAA’s wake turbulence research program and authorizes $500,000

for FY2004 for this assessment.

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. Vision 100 authorizes the

installation, operation, and maintenance of ground-based precision navigational aids

at mountain airports. Vision 100 specifically mentions implementing navigational

aids that can also provide curved and segmented flight paths for noise abatement

purposes. However, currently available ground-based navigational aids are not

always viable options at mountain 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 satellitebased 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, groundbased, 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. Vision 100 authorizes the expenditure of such sums as may

be necessary to improve air traffic services in the Gulf of Mexico. This 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 program is also expected to improve aerial surveillance in the gulf for

national security and law enforcement purposes.

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). 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. Vision

100 requires the Department of Homeland Security to establish an Aviation Security

Capital Fund to relieve some of the demand on AIP funds for airport security

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projects. Vision 100 authorizes funding levels of $500 million per year for FY2004

through FY2007 and requires that the first $250 million collected each year from

aviation security fees be deposited into the fund. Distributions from half of the

fund’s annual appropriations are to be allocated in the following manner: 40% to

large hub airports; 20% to medium hub airports; 15% to small hubs; and the

remaining 25% to be distributed at the discretion of the Secretary for Homeland

Security based on an assessment of aviation security risks. The other half of the

fund’s annual appropriations are to be used for discretionary grants, with priority

given to funding projects with existing letters of intent. Under this program, hub

airports are required to pay for 10% and non-hubs are required to pay for 5% of a

security project’s costs using non-federal funds.

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 inline 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. 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, while report language accompanying the

Homeland Security Appropriations Act for FY2004 (P.L. 108-90; H.Rept. 108-280)

anticipates collections of only $2.070 billion, about 55% of the total operating budget

of $3.732 billion for aviation security. Vision 100 also authorizes reimbursement to

airports and air carriers for certain aviation security related costs, limited to the cost

of screening catering supplies and checking documents at security checkpoints.

Other Aviation Security Measures. While the FAA’s role in aviation

security has been largely transferred to the TSA, Vision 100 has served as a vehicle

for enacting several legislative initiatives and reforms for aviation security. Vision

100 contains provisions allowing flight engineers and flight crews on all-cargo

aircraft to participate in the Federal Flight Deck Officer Program that trains and

deputizes pilots to carry firearms to defend the cockpit. The program was initially

limited to pilots of passenger aircraft. Vision 100 also modifies legislation regarding

security training for flight and cabin crew of passenger airliners. The new provisions

consist of a required basic security training program and an optional advanced selfdefense training program administered by the TSA. Vision 100 also mandates a

formal appeals process for pilot certificate actions, such as denials and revocations

of pilots licences, on security grounds. Vision 100 establishes a requirement for the

FAA to submit classified justification reports to the House Transportation and

Infrastructure Committee and the Senate Commerce Committee regarding its

decisions to establish and maintain any Air Defense Identification Zone (ADIZ),

such as the one in place around Washington, DC, requiring special identification,

communications, and operational procedures for aircraft. Vision 100 provides for up

to $100 million in direct reimbursement to general aviation entities for losses

incurred as a direct result of security measures imposed in response to the terrorist

attacks of September 11, 2001 and requires the development and implementation of

a security plan to resume general aviation operations at Washington Reagan National

Airport (DCA). Vision 100 also modifies provisions in ATSA to further standardize

CRS-13

charter flight security, modify and streamline background checks of foreign flight

school students, and increase oversight of security at foreign repair stations.

Vision 100 strikes the TSA’s staffing cap of 45,000 enacted under the

Consolidated Appropriations Resolution for FY2003 (P.L. 108-7), however, it does

not remove the FY2004 funding cap of 45,000 full time equivalent screeners enacted

in the Homeland Security Appropriations Act for FY2004 (P.L. 108-90). Vision 100

also requires that the DHS certify that concerns regarding the Computer-Aided

Passenger Pre-Screening Version 2 (CAPPS2) program are resolved before that

system can be implemented other than on a test basis.

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. Oversight of many repair stations located in foreign countries is

delegated to inspectors from those foreign countries. FAA recently revised 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. Vision

100 contain provisions that would require the FAA to develop an action plan for

providing adequate oversight of repair stations and ensure that repair 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. Vision 100 mandates that FAA 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 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.

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Another concern is that FAA maintenance and operations inspectors may lack

the continuing training needed to keep up with current technologies. Vision 100

directs the GAO 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. Vision 100 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.

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.

Vision 100 mandates the certification of flight attendants. The objective of this

measure 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 will likely improve airline safety by establishing

industry-wide training and proficiency standards.

Cabin Air Quality. Vision 100 directs the FAA to establish a research

program on airliner cabin air quality. Vision 100 specifically directs FAA to assess

ozone levels, pesticide exposure, and other contaminants to which passengers and

crew are exposed as well as cabin pressure and altitude on a representative number

of aircraft and flights. Vision 100 also requires the FAA to establish a cabin air

quality incident reporting system.

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 were originally introduced in the Senate in the

Second Century of Flight Act (S. 788). In the House, two separate RD&E bills were

offered (H.R. 2271, H.R. 2734), however neither was considered on the House floor.

Elements of these bills are reflected in the final conference report and in Vison 100.

Vision 100 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.

CRS-15

Coordination of Research and Development Efforts. Vision 100

requires that a Next Generation Air Transportation System Joint Planning and

Development Office be established within FAA, with an annual budget of $50

million for FY2004 through FY2010, 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. In this regard, Vision

100 meshes two legislative proposals considered in the FAA reauthorization debate:

a proposed aerospace and aviation liaison office within DOT to coordinate aviation

and aeronautics research, and a proposed 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. Vision 100 instead adopts language based on H.R. 2734 detailing the

organization and functions of the Next Generation Air Transportation System Joint

Planning and Development Office. Vision 100 also establishes a Next Generation

Air Transportation Senior Policy Committee established by the DOT to assist th joint

planning and development office. The senior policy committee is to be comprised

of representatives from the DOT, the FAA and NASA, as well as the Departments

of: Defense, Homeland Security, and Commerce, as well as the Office of Science and

Technology and any other federal agencies determined to have a significant interest

in or responsibility for aspects of the national airspace system.

Aviation and Aerospace Education. Vision 100 establishes NASA and

FAA-sponsored merit-based scholarships for higher education in fields related to

aerospace and aviation safety. Both NASA and the FAA will administer their

scholarship programs independently, however the two programs are virtually

identical. Both the NASA and FAA scholarship programs are authorized to receive

up to $10 million per year. A separate provision reauthorizes 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 research initiatives

already mentioned, Vision 100 specifically mentions airfield pavements and

pavement standards as a research area to be addressed by the FAA. The legislation

also directs the FAA to establish a center for excellence in advanced materials, such

as composites, for transport category aircraft and authorizes $500,000 for FY2004

to develop the center. Vision 100 also establishes a rotorcraft research and

development initiative within the FAA to reduce rotorcraft noise, vibration, and

weight, and to improve rotorcraft safety and all-weather capabilities within the next

10 years. Vision 100 also mandates that the FAA 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. Vision 100 also establishes a four-year pilot

Airport Cooperative Research Program to identify and fund research on airport issues

not adequately addressed by existing federal research programs.

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FAA Organizational Issues

Chief Operating Officer (COO). This position was created by AIR21.

According to the statute, the COO position was designed to allow the FAA to hire

someone with experience operating high technology integrated systems like air traffic

control. The COO position, however, was not filled until Russell Chew was

appointed to the position in June 2003. Filling the position proved to be a

controversy in itself as it took more than three years to find a qualified candidate.

Before the position was finally filled, several candidates apparently turned down the

position because it was perceived as a very difficult job offered at a pay scale far

below what might be offered for a similar position in private industry. As defined in

AIR21, some were concerned 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. Vision 100 seeks to clarify this relationship

and make the COO position itself more desirable.

Air Traffic Control Privatization. The House bill included a provision that

prohibited 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 the original conference report (H.Rept. 108-240) a less stringent prohibition

on privatization was adopted that precluded transfer of ATC to a private or public

entity prior to October 1, 2007. The provision, however, would have allowed the

contract tower program to expand at certain defined levels. This provision was

inserted without support from Minority Conference Committee Members and

represented an agreement reached by the Majority Members of the Conference and

the Bush Administration. This provision became the most contentious item in the bill

with some Members vowing to try to defeat the Conference Report unless the

provision was eliminated. The union representing air traffic controllers was

particularly critical of the provision and launched a wide ranging campaign to see

that this provision was not adopted. Based largely on this controversy, on October,

28, 2003, the House voted unanimously (407-0) to recommit the bill back to the

conference. On October, 29, 2003, a new conference report (H.Rept. 108-334) was

filed. This new conference report, which was almost identical to the original except

for some minor technical corrections and deletion of the language pertaining to air

traffic control privatization protections, was agreed to by the House by a narrow

margin (211-207) on October 30, 2003. By striking the privatization protection

language, the bill maintains the status quo on this matter, under which the FAA may

privatize any air traffic control function at its discretion in accordance with

applicable statutes, regulations, and guidelines pertaining to outsourcing.

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In order to gain final passage of the Conference Report in the Senate, The FAA

Administrator promised, in a letter, that it would take no action on privatization of

any type prior to the end of FY2004. It is quite possible that this issue will reappear

at some point during the 2nd Session of the 108th Congress.

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