H.R. 658 (112^th): FAA Modernization and Reform Act of 2012

GovTrack’s Bill Summary

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Library of Congress Summary

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.

House Republican Conference Summary

The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.

This summary can be found at http://www.gop.gov/bill/112/1/hr658.

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 passed 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.  The most recent extension, H.R. 6473 in the 111th Congress (PL 111-329), was passed by the House of Representatives on December 2, 2010, by voice vote.  Earlier this week, the House passed another short-term FAA authorization bill, which will extend FAA functions through May 31, 2011, while the House and Senate deliberate on a long-term authorization bill.

Summary

H.R. 658 would reauthorize the Federal Aviation Administration (FAA) operations and programs for four years, including the remainder of FY 2011 through FY 2014.  In addition, the bill would make a number of policy changes, including a repeal of a National Mediation Board (NMB) rule allowing air or rail employees to unioinize without a majority vote.  The bill would phase out funding for the Essential Air Service (EAS) program and reduce overall spending relative to the current spending baseline by $4 billion.  The bill also reduces spending by permitting greater use of contractors in the air traffic control system, potentially saving $400 million through FY 2014.  H.R. 658 does not raise aviation fuel taxes or passenger facility charges above current law levels.

Authorizations

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

• Authorizes $36.9 billion for FAA operations, primarily for salaries and expenses related to operating the air traffic control system.  The bill would authorize $9.4 billion for FY 2011 and $9.16 billion for each fiscal year 2012 through 2014.  According to CBO, funding for FAA operations is $53 million more than the annualized amount in 2011 under current law.
  
  
• Authorizes $12.17 billion in contract authority from the aviation trust fund for Airport Improvement Programs (AIP).  The bill would authorize $3.17 billion for FY 2011 and $3 billion for each fiscal year 2012 through 2014 for AIP programs.  According to CBO, funding for AIP programs is $3 billion below the current baseline over the FY 2011 through FY 2016 period.
  
  
• Authorizes $10.5 billion for Air Navigation Facilities and Equipment through FY 2012. The bill would authorize $2.7 billion for FY 2011 and $2.6 billion for each fiscal year 2012 through 2014.  According to CBO, funding for Air Navigation Facilities and Equipment is $236 million less than the annualized amount in 2011 under current law.

• Authorizes $328 million for airport programs administrative expenses between FY 2010 and FY 2012 for FAA research, engineering and development. The bill would authorize $85.9 million for FY 2011 and $80.6 million for each fiscal year 2012 through 2014.

• Authorizes $188 million for the Essential Air Service (EAS) program through FY 2013.  The Essential Air Service (EAS) program provides subsidies to air carriers that provide air service to certain rural communities.  Under current law, $77 million is authorized to be appropriated for the EAS program each year in perpetuity.  H.R. 658 would phase out and sunset the program by providing an authorization of $98 million for the program in FY 2011, $60 million in 2012, and $30 million in 2013.  No appropriations would be authorized after 2013.   According to CBO, the bill would save $302 million over the 2011-2016 period by phasing out EAS.

Taxes

The bill 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

In 2010, the National Mediation Board (NMB), a federal entity which oversees union elections for airlines and railroads, unilaterally issued a rule change on how union elections are held for airlines.  The NMB’s new rules overturned the “majority rule” voting process for unionization which had been in effect for 75 years.  Under the new rules, the NMB will recognize union certification votes where only a majority of the employees who participate in the election vote for certification—as opposed to a majority of all employees.  According to the House Committee on Transportation and Infrastructure, “Under the rules which had been in place for 75 years, if an airline had 4,000 nonunion employees, 2,001 must vote yes to unionize.  Under the rule changes, if only 1,000 of 4,000 employees vote and 501 vote yes, all 4,000 become subject to unionization.”  Thus, the new rule assumes that a failure to vote is a “yes” vote.   H.R. 658 would repeal this new NMB ruling and revert to majority rules voting for union certification.

Airport and Airway Trust Fund Financing

H.R. 658 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 2014.  Under current short-term extensions, these authorities would expire on May 31, 2011.

Airport and Airway Trust Fund Guarantee

H.R. 658 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 2011 through FY 2014.

Passenger Facility Charges

The bill would retain the current Passenger Facility Charges, which are collected by airlines and given directly to airports.  FAA reauthorization bills passed in the House in the 111^th Congress would have raised fees from $4.50 to $7, an increase of 56 percent.  While H.R. 658 would not raise passenger facility charges, the bill would authorize pilot program that allows up to five airport agencies to charge fees in excess of the statutory limit in order to finance certain capital projects.

In addition, the bill 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

H.R. 658 would require 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.  According to CBO, this provision would increase revenues in fiscal years 2011 through 2015.  The Joint Committee on Taxation estimates that those increases would total $44 million over the 2011-2015 period.

Airport Improvement Program Modifications

The bill 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

H.R. 658 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.  H.R. 658 would also establish the Director of the Joint Planning and Development Office (JPDO) 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

H.R. 658 contains the following new provisions and regulations meant to address safety concerns, including:

Inspection of Foreign Repair Stations:  The bill would require the FAA Administrator to verify that each certified foreign repair station has been subject to a safety assessment.

Runway Safety:  The bill 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 bill would require the FAA to issue “improved pilot licenses” which are resistant to tampering within nine months of enactment.

Flight Attendant Fatigue:  The bill would require the FAA to conduct a study on flight attendant fatigue by September 30, 2012.

Cockpit Smoke:  The bill 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 bill 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 bill 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 111^th Congress had banned the use of mobile voice communications during a flight.

Safety Critical Staffing:  The bill would authorize $813 million over three years for safety critical positions in the Flight Standards Service and Aircraft Certification Service.

Aviation Insurance

H.R. 658 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. 

Cost

According to the Congressional Budget Office (CBO), H.R. 658 would increase discretionary spending by $33.9 billion over the FY 2011 through FY 2016 period.  In total, the bill would include $47.6 billion in discretionary spending authority.  In addition, CBO estimates that the bill would decrease direct spending by $4 billion and increase revenue by $34 million over the FY 2011 through FY 2016 period.

House Democratic Caucus Summary

The House Democratic Caucus does not provide summaries of bills.

So, yes, we display the House Republican Conference’s summaries when available even if we do not have a Democratic summary available. That’s because we feel it is better to give you as much information as possible, even if we cannot provide every viewpoint.

We’ll be looking for a source of summaries from the other side in the meanwhile.