The U.S. Congress appears poised to pass a four-year FAA reauthorization bill that would keep the federal cap on passenger facility charges (PFCs) and fund the airport improvement program (AIP) at a flat rate of $3.35B per year through fiscal 2015. House and Senate conferees ironed out details of the bill on Tuesday, and it is expected to pass into law in the coming days.
The long-term reauthorization, if passed, is the first multi-year funding bill since 2007. The aviation industry has seen 23 temporary extensions to the funding bill.
“The fact that we’re no longer going to be lurching from one extension to another and living in this constant state of instability is a good thing, but I don’t have anything else good to say about it,” says Greg Principato, president of Airports Council International – North America.
Principato says the continuing cap on PFCs will hamper airports’ growth and modernization efforts. “The country is in serious financial shape, we all know that,” Principato says. “The PFC charge a mechanism that is used all over the world. It doesn’t add anything to federal or state or local deficits. it’s the most efficient way to develop infrastructure, and keeping that tool out of the hands of airports makes no sense.”
The lack of an increase in AIP funding is also a concern, Prinicipato says. “NextGen begins and ends at the airport, and by cutting the government funding and keeping the PFC flat you’re not going to have any investment on the ground that will make NextGen work,” he says. The $3.35B is equal to the most recently appropriated amount, but it is about $150M less than the previous year’s appropriation.
Funding for the Essential Air Service (EAS) program – a contentious issue in previous negotiations — will be maintained at roughly $190M per year. Initially, the House had proposed to phase out the program in all states except Alaska and Hawaii. The latest bill contains only modest reforms.
A long-term agreement on FAA reauthorization was elusive for years and was recently held up due to disagreements on a labor provision. Republicans had objected to a rule that makes it easier for rail and aviation employees to unionize, and tried to insert a provision that would have counted a “no” vote when workers failed to vote on whether to unionize. The Obama administration had threatened a veto. With the latest compromise, reports said, Republicans dropped their demand. In exchange, Democrats agreed to include a provision that would raise the threshold of worker interest required for triggering an election on whether to form a union to 50% from 35%.
