H.R. 658 Conference Report: Conference Report Accompanying H.R. 658—FAA Reauthorization and Reform Act of 2012

H.R. 658

Conference Report Accompanying H.R. 658—FAA Reauthorization and Reform Act of 2012

Sponsor
Rep. John Mica

Date
February 3, 2012 (112th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Friday, February 3, 2012 the House is scheduled to consider the Conference Report to H.R. 658, the FAA Reauthorization and Reform Act of 2012. H.R. 658 was introduced by Rep. John Mica (R-FL) on February 11, 2011, and was referred to the House Committee on Transportation and Infrastructure.  On February 16, 2011, a markup was held and the committee reported the legislation by a vote of 34-25. One April 1, 2011, H.R. 658 was approved in the House by a vote of 223-196.

Bill Summary

The Conference Report would reauthorize the Federal Aviation Administration (FAA) operations and programs for four years, from FY 2012 through FY 2015. The legislation would provide a total authorization of $63.4 billion over the four year period, including $50 billion in discretionary authorizations and $13.4 billion in contract authority through the Airport Improvement Programs (AIP). The bill would extend the authority to expend funds from the Airport and Airway Trust Fund through FY 2015. The bill would also extend current taxes on aviation fuel, domestic and international ticket taxes, and taxes on cargo shipped by air through FY 2015. In addition, the bill would reform National Mediation Board (NMB) rules to require public hearings before any significant NMB ruling takes effect and by increasing the proportion of eligible members needed to petition for new union elections from 35 percent to 50 percent.

Authorizations

The Conference Report would authorize appropriations for a number of FAA operations as follows:

  • The bill would authorize $38.4 billion in appropriations for FAA operations, primarily for salaries and expenses related to operating the air traffic control system.  The bill would authorize $9.65 billion for FY 2012, $9.53 billion in FY 2013, $9.59 billion in FY 2014, and $9.65 billion in FY 2015. The House bill provided a total of $36.9 billion over four years, while the Senate bill provided $19 billion over two years.
  • The bill would authorize $13.4 billion in contract authority from the aviation trust fund for Airport Improvement Programs (AIP). The bill would authorize $3.35 billion each fiscal year from 2011 through 2015 for AIP programs. The AIP provides federal grants to airports for airport development and planning. The funds obligated for the AIP are drawn from the Airport and Airway Trust Fund, which is supported by a variety of user fees and fuel taxes that are authorized within this legislation.
  • The bill would authorize $10.9 billion for Air Navigation Facilities and Equipment through FY 2015. The bill would authorize $2.7 billion for FY 2012 through FY 2015. The account provides funds for the procurement of equipment and for the construction of facilities.
  • The bill would authorize $168 million for airport programs administrative expenses annually between FY 2012 and FY 2015 for FAA research, engineering and development. In total, the bill would authorize $672 million for the programs.
  • The bill would authorize $54.7 million for the Essential Air Service (EAS) program for a period beginning on October 1, 2011, and ending on February 17, 2012.  The bill would authorize $143 million for the program in FY 2012, $118 million for FY 2013, $107 million for FY 2014, and $93 million in FY 2015. The EAS program gives subsidies to air carriers that provide air service to certain rural areas.  In August 2012, Congress enacted reforms (P.L. 112-27) to restrict EAS funding to airports located more than 90 miles from the nearest medium or large hub airport and prohibit subsidies for areas with an average subsidy per passenger of more than $1,000 during the most recent fiscal year.

Taxes

The Conference Report would extend certain aviation-related taxes that are used to finance the Airport and Airway Trust Fund, including ticket taxes. Specifically, the bill would extend the domestic passenger ticket tax at its current level of 7.5 percent of ticket price, the domestic flight segment tax which is adjusted annually for inflation and is currently at a level of approximately $3.70 per passenger, and the domestic cargo tax at 6.25 percent of the cost of transporting property.  In addition, the bill would retain the 4.3 cent-per-gallon tax on commercial aviation fuel.  The measure would also extend the existing tax rate for aviation-grade kerosene used for non-commercial aviation purposes at a rate of 21.8 cents-per-gallon and the non-commerical aviation gasoline tax would remain at the current 19.3 cents-per-gallon.

National Mediation Board Union Election Rules

The Conference Report would reform National Mediation Board (NMB) rules regarding unionization by requiring public hearings before any significant NMB ruling takes effect and by increasing the proportion of eligible members needed to petition for new union elections from 35 percent to 50 percent. Many unions have expressed opposition to the changes in the Conference Report and argue that they create new roadblocks for employees to form unions.

Airport and Airway Trust Fund Financing

The Conference Report would extend the FAA's authority to spend money from the Airport and Airway Trust Fund (AATF), charge taxes, and their appropriated spending levels for four years, through FY 2015.  Under current short-term extensions, these authorities would expire on February 17, 2012.

Airport and Airway Trust Fund Guarantee

The Conference Report would amend the current Airport and Airway Trust Fund Guarantee which requires the total budget resources available from the trust fund be equal to the level of estimated receipts, plus interest.  Under the bill, funding for the trust fund would be guaranteed at 90 percent of the estimated level of receipts plus interest from FY 2012 through FY 2015.

 

Passenger Facility Charges 

The Conference Report would retain the current $4.50 maximum Passenger Facility Charges, which are collected by airlines and given directly to airports. FAA reauthorization bills passed in the House in the 111th Congress would have raised fees from $4.50 to $7, an increase of 56 percent.

In addition, the Conference Report would require the Comptroller General of the Government Accountability Office (GAO) to conduct a study of alternative means of collecting passenger facility charges without including the fees in the ticket price.

 

Overflight Fees

The Conference Report would authorize the FAA to increase fees for certain navigational services provided for flights that neither take off nor land in the United States, known as overflight fees. Such fees are generally paid by foreign air carriers and are recorded as revenues. The Conference Report would require the FAA to guarantee that the overflight fees are reasonably related to the costs for providing air traffic services and to adjust the fees accordingly.

Airport Improvement Program Modifications

The Conference Report would make a number of changes to the AIP, which provides grants to airports that are included in the National Plan of Integrated Airport Systems. Under current law, the federal government's share for an AIP project is 75 percent for large-hub or medium-hub airports, and 90 percent for most other airports, including those funded through state block grants.  The bill would cap the amount of discretionary AIP funds that could support terminal development projects at non-hub or small-hub primary airports at $20 million. H.R. 658 would amend the current-law definition of “airport development” to include the acquisition of firefighting equipment that service aircraft designed for more than nine passenger seats, but fewer than 31 seats—rather than more than 20 seats as required under current law.  In addition, the bill would extend the Contract Tower Program to low activity air traffic control towers.  Under the program, the FAA funds the cost of operating air traffic control towers.  Any excess funding provided under the program could be used to carry out the Contract Tower Cost-Sharing Program.

Next Generation Air Transportation System

The Conference Report would streamline the funding processes for Next Generation (NextGen) air traffic control modernization projects planned in the next four years by prioritizing amounts allocated to the NextGen projects.  The bill would require the FAA Adminstrator to appoint a “Chief NextGen Officer” to implement NextGen activities and budgets across all FAA program offices. The Conference Report would also establish the Director of the Joint Planning and Development Office (JPDO) as the Associate Administrator for the NextGen Air Transportation System to oversee the NextGen program and implementation. The bill would also establish the NextGen senior policy committee to meet at least twice each year and requires the Transportation Department to submit a detailed annual report on the progress of NextGen.

Safety

The Conference Report contains the following new provisions and regulations meant to address safety concerns, including:

Inspection of Foreign Repair Stations: The Conference Report would require the FAA Administrator to establish a system to verify that each certified foreign repair station has been subject to an annual safety assessment.

Runway Safety: The Conference Report would require the FAA Administrator to develop a strategic runway safety plan, with an emphasis on preventing runway incursions and submit to Congress within six months of enactment.

Pilot Licenses: The Conference Report would require the FAA to issue “improved pilot licenses” which are resistant to tampering and include a photograph, incorporate biometric identifiers.

 

Flight Attendants: The Conference Report would require that flight attendants be able to read, speak and write English well enough to read and comprehend material and to provide direction to, and understand and answer questions from, English-speaking individuals.

Cockpit Smoke: The Conference Report would require the GAO to conduct a study on the effectiveness of oversight activities of the Federal Aviation Administration relating to the use of new technologies to prevent or mitigate the effects of dense, continuous smoke in the cockpit of a commercial aircraft.

Air Service Improvements

Smoking Prohibition: The Conference Report would continue a ban smoking on any passenger interstate air transportation or foreign air transportation or in an aircraft in nonscheduled passenger interstate or intrastate air transportation, if a flight attendant is a required crewmember on the aircraft.

Cell Phones: The Conference Report would require the FAA to conduct a study of on the impact of the use of cell phones for vocal communication during a flight. FAA reauthorization bills from the 111th Congress had banned the use of mobile voice communications during a flight.

Aviation Insurance

The Conference Report would reauthorize the FAA aviation insurance program, which is intended to provide insurance to domestic airlines that cannot be provided through the commercial insurance market.   The bill would extend the provision through December 31, 2013. 

 

Background

The FAA is an agency within the Department of Transportation that oversees and regulates the nation’s aviation system.  The Airport and Airway Trust Fund (AATF), created by the Airport and Airway Revenue Act of 1970, provides funding for the nation’s aviation system through several aviation excise taxes.  Funding currently comes from collections related to passenger tickets, air cargo excise taxes, passenger flight segments, and aviation fuels, among other sources.

The last long-term authorization of the Federal Aviation Administration (FAA), known as the Vision 100—Century of Aviation Reauthorization Act, was approved in 2003 and expired at the end of FY 2007.  Since that time, the FAA has operated under a series of temporary extensions.  In the 110th and 111th Congresses, the House passed several short-term FAA extensions which were signed into law.  Currently, FAA’s authorization and authority to levy taxes and expend revenue is set to expire on February 17, 2012. FAA’s authority to collect aviation trust fund revenues and expend money in the trust fund already lapsed for more than two weeks on July 22, 2011, and was not reauthorized until the Senate approved H.R. 2553 on August 5, 2011.

The House approved a long-term FAA extension, H.R. 658, the FAA Reauthorization and Reform Act of 2011, which would reauthorize FAA operations, contract authority and taxing ability through FY 2014.  The long-term FAA reauthorization was approved in the House on April 1, 2011, by a vote of 223 – 196.  The Senate amended the language of H.R. 658 and replaced the text of the bill with a Senate substitute. On January 31, 2012, the House Transportation and Infrastructure Committee announced that an agreement had been reached among the Conference Committee.

Cost

A CBO score for the Conference Report accompanying H.R. 658 was not available as of press time.