[Congressional Record Volume 140, Number 108 (Monday, August 8, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
FEDERAL AVIATION ADMINISTRATION AUTHORIZATION--CONFERENCE REPORT ACT OF 
                                  1994

  Mr. FORD. Mr. President, I submit a report of the committee of 
conference on (H.R. 2739) and ask for its immediate consideration.
  The PRESIDING OFFICER. The report will be stated.
  The legislative clerk read as follows:

       The committee on conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     2739) to amend the Airport and Airway Improvement Act of 1982 
     to authorize appropriations for fiscal years 1994, 1995, and 
     1996, and for other purposes, having met, after full and free 
     conference, have agreed to recommend and do recommend to 
     their respective Houses this report, signed by a majority of 
     the conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report.
  (The conference report is printed in the House proceedings of the 
Record of August 3, 1994.)
  Mr. FORD. Now, Mr. President, I ask unanimous consent that the Senate 
proceed to the consideration of the conference report on H.R. 2739, the 
Federal Aviation Administration authorization bill; that the conference 
report be agreed to, the motion to reconsider be laid upon the table, 
and any statements thereon appear in the Record at the appropriate 
place as though read.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the conference report was agreed to.
  Mr. FORD. Mr. President, let me make a comment about the conference 
report we have just approved. It has been a laborious process leading 
up to the passage of the bill. I remember when we had this bill in the 
Chamber we had three germane amendments, we had seven amendments on 
Whitewater, one on Korea, and one on EEOC. And so it took about 9 days 
to get the bill out of the Senate and to conference. I am very pleased 
tonight that this conference report has been approved.
  Let me compliment my chairman, Senator Hollings. He supports his 
subcommittee chairmen without any reservation. When he is needed, he 
comes and helps and allows us to proceed. He worked with the conference 
committee diligently and is one of the main reasons we were able to 
complete this conference in such a timely manner.
  I also want to compliment Senator Danforth, the ranking member of the 
Commerce Committee. He had such strong interest in this bill, and he 
stayed with us in the conference committee. I am grateful to him for 
his interest in the bill and his support.
  Mr. President, let me also thank two of my staff members, Sam 
Whitehorn and Martha Moloney for their long hours and diligent work in 
making this moment possible; and my ranking member, Senator Pressler, 
and to the minority staff who have worked in a bipartisan way to see 
that this bill has come to fruition now, and to be sent to the 
President for his signature.
  Today, before my colleagues is the conference report to H.R. 2739, 
the Federal Aviation Authorization Act of 1994. As my colleagues know, 
earlier this year we spent 8 days trying to pass a bill to provide 
airports with Federal funds. Most of those days were spent on issues 
wholly unrelated to the FAA or to airports. We had amendments on 
Whitewater, North Korea, and EEOC, all of which consumed enormous 
amounts of time.
  I can now report to my colleagues that we have a final agreement with 
our House colleagues on funding for the FAA for the next 3 years. Let 
me explain briefly what the bill before you does. The bill:
  Provides authorization for the airport improvement program, 
facilities and equipment, operations and research of the FAA for 3 
years;
  Sets out a process to resolve airport-airline fee disputes on an 
expedited basis and guards against illegal revenue diversion;
  Does not, and I repeat, does not, require that fees in dispute be 
placed in an escrow account. This is something that was discussed at 
great length when the bill was passed on the Senate floor this past 
June;
  Preempts State regulation of intermodal air cargo carriers and other 
companies engaged in the transportation of cargo; and,
  Establishes a 5 year term for the Administrator of the FAA.
  As my colleagues are well aware, this is an important funding bill. 
Because of its importance, we have spent many days on the Senate floor 
debating its merits, and spent many days discussing with the aviation 
community and financial community its true impacts. I can assure my 
colleagues that this bill will, and I repeat, will, provide funds for 
airports.
  I also want to touch on a few provisions. First, the bill includes a 
5 year term for the administrator of the FAA. The position of 
leadership at the FAA is a critical one. All too often the FAA 
Administrator, though able, stays but a short time. The average tenure 
is about 18 months, which is not long enough to really get to know the 
agency, make decisions, and see them carried out. Earlier this year, we 
got into a great debate on whether or not to establish an air traffic 
control corporation, something which has since been laid to rest. 
However, all concerned recognize the need to reform the FAA, and the 5 
year term will help the FAA with a continuity of leadership and 
stability.
  The airline-airport fee dispute process sets out specific time 
frames, ensures that airlines can recoup funds if a fee is determined 
to be unreasonable, and specifies when a civil penalty can be imposed. 
The conferees wanted to ensure that airport sponsors be able to 
mitigate any penalty, and language in the report specifically addresses 
this matter. In addition, and most important, airports that are now 
permitted to divert funds legally, are not affected by this 
legislation. Rights held before by a limited number of airports 
continue. This is a matter that was raised by a number of colleagues, 
from Massachusetts to California, and I want to assure them that the 
grandfathered airports are unaffected.
  With respect to section 211, as passed by the Senate, the House 
conferees sought to modify the Senate provision to ensure that 
regulatory burdens for all those in the cargo industry are limited. The 
Senate conferees receded to the House on this matter.
  I want to thank my Senate conferees, and colleagues for all of their 
assistance and suggestions. As many of you know, we had to conference 
this bill with six committees. Without the assistance of many of you in 
a timely manner, this bill would not be before you today.
  I want to thank personally our House colleagues, Chairman Mineta, 
Congressman Oberstar, the aviation subcommittee chairman, Congressman 
Rahall, the surface transportation subcommittee chairman, as well as 
the ranking members of those committees, Congressman Shuster, Clinger, 
and Petri, respectively, for all of their fine work. I must recognize 
as well the leadership of the House Science and Technology, Foreign 
Affairs, Ways and Means, and Banking committees for all of their 
cooperation and efforts.
  Finally, I want to recognize the staff of the House, who worked long 
and hard to resolve all of the issues and put the report to bed late 
Friday night, for senior staff to the excellent work of the staff 
assistants. I know the House aviation staff has met for weeks with my 
staff and I want to extend my thanks to Dave Hymsfeld, Dave Traynham, 
Mary Walsh, Caroline Gabel, Dave Schaeffer, Donna McLean, and Ed 
Fedderman as well as Mary Beth Gaiarin, Gretchen Biery, and Linda 
Burdett.
  Mr. PRESSLER. Mr. President, as ranking member of the Senate Aviation 
Subcommittee, I am very pleased the Senate is about to pass the 
conference report to H.R. 2739, the Federal Aviation Administration 
Authorization Act of 1994. This is a very important bill, providing a 3 
year authorization for the FAA's Airport Improvement [AIP]. Prompt 
enactment of this measure is critical to our Nation's airports.
  While almost $1.7 billion has been appropriated for AIP for fiscal 
year 1994, about one-half of this appropriation has not been available 
to local communities in South Dakota and other States in dire need of 
AIP funding. This is because the AIP program has not been fully 
authorized since it expired in 1993.
  We were able to pass a temporary authorization bill in May, releasing 
about $800 million for AIP grants. However, this provided only 
temporary relief following an 8-month gap in AIP. No AIP grants have 
been made available since June 30 of this year. This is very troubling 
because the construction seasons in many of our States soon will be 
over.
  In addition to reauthorizing AIP for 1994 through 1996, the 
conference agreement includes several provisions that merit attention:
  Section 207, the Air Service Termination Notice. This section 
requires air carriers to provide 45 days advance notification prior to 
terminating air service at non-hub airports. I am very pleased the 
conference members were able to reach an agreement on this section. 
Cities in South Dakota and other rural areas struggle continually to 
maintain jet service. I would have preferred the conferees to have 
retained the provision as passed by the Senate--requiring a 60 day 
advance notice. However, I hope our compromise will be an important 
step in helping smaller communities in their struggle to maintain 
adequate air service.
  Section 206, Slots for Air Carriers at Airports. This section of the 
bill addresses the issue of takeoff and landing rights at high density 
airports, commonly know as slots. These slots are necessary for 
operations at four of our Nation's busiest airports, Chicago O'Hare, 
New York LaGuardia, New York Kennedy, and Washington National.
  I am particularly pleased the conference agreement provides that the 
Secretary of Transportation shall insure that air carriers wishing to 
provide essential air service [EAS] at high density airports will be 
granted the necessary operational authority to do so. A preference is 
expressed in the conference agreement for the use of what are known as 
exemptions. These exemptions would be used by EAS carriers to provide 
service unless the Secretary determines that such an exemption would 
significantly increase operational delays.
  In the event that the Secretary cannot use an exemption to ensure EAS 
service, the Secretary shall take other necessary actions to ensure 
access, including the withdrawal of slots from incumbent carriers. This 
is a major step forward for communities in States like South Dakota 
that are dependent on EAS subsidies and want access to high density 
airports.
  Section 601, the Preemption of Intrastate Transportation of Property. 
This is one provision in the Senate-passed bill that caused me concern. 
It would have provided for the preemption of State Law for certain 
intermodal all-cargo carriers engaged in intrastate transportation. My 
concern was for those transportation companies not covered by the 
Senate provision.
  I believe the conferees have reached a more reasoned approach. 
Section 601 makes it clear that the preemption would apply to all firms 
operating in intrastate transportation, so that smaller companies would 
be put on a level playing field. In addition, to the extent that 
trucking companies want to avail themselves of certain State economic 
regulations, they can choose to be covered by such. The agreement also 
emphasizes that States maintain their authority to regulate certain 
essential areas, such as safety and insurance regulations. Those 
necessary aspects of State regulatory authority are clearly preserved.
  Mr. President, these are just a few of the provisions of the bill I 
consider to be important. It is a sound agreement. It authorizes 
funding for the capital needs of our Nation's commercial airports and 
general aviation facilities. I urge adoption of the conference report.
  Mr. President, at this time I would like to take the opportunity to 
congratulate the chairman of the Aviation Subcommittee, Senator Ford, 
for his leadership on this bill. Further, I want to commend the other 
Senate conferees who helped us to move this bill through the 
legislative process: the chairman of the Commerce Committee, Senator 
Hollings, the ranking member of the committee, Senator Danforth, and 
Senator Exon.
  In addition, I want to thank the staff members for all of their hard 
work on this time consuming bill. First, I would like to thank Alan 
Maness and Betsy Iverson from the Senate Commerce Committee for their 
assistance. I also want to extend my appreciation to Martha Moloney 
from Senator Ford's staff, Sam Whitehorn from the Senate Commerce 
Committee, Chris McLean from Senator Exon's staff and Ann Begeman of my 
staff.
  Mr. HOLLINGS. I am pleased to speak in support of the conference 
report on H.R. 2739. This airport improvement bill has had a long road 
to final passage. Last November the Committee on Commerce, Science, and 
Transportation reported S. 1491, the Federal Aviation Authorization Act 
of 1993. But it was not until last Friday night, at around 11 p.m., 
that the House and Senate conferees reached a final agreement, and the 
conference report was completed. The House of Representatives passed 
the conference report on Monday, August 8, 1994, enabling the Senate to 
consider the matter expeditiously.
  As my colleagues all know well, this bill provides funds for all of 
our Nation's airports. Without this bill, no airport can receive 
Federal funds to meet its safety and capacity needs.
  I want to discuss a number of issues addressed in the bill, and some 
that were not included, as a result of the conference. First, the bill 
sets out a 3-year authorization of appropriations for the entire 
Federal Aviation Administration [FAA], including airport improvement, 
operations, facilities, and research. Second, the bill provides a 
procedure for airports and airlines to settle disputes over airport 
rates and charges. The procedure differs from that proposed earlier 
this year by the Department of Transportation, primarily by setting out 
an expedited decisionmaking process. Representatives of airlines, 
airports, the bond community, and many other affected interests have 
spent a great deal of time going through each of the issues, and have 
reached a compromise. It is a fair compromise, and one supported by all 
sides.
  Third, the bill as it passed the Senate addressed a problem of 
fairness in the air cargo industry. One carrier, Federal Express, as a 
result of a decision in the Ninth Circuit Court of Appeals, is treated 
as an air carrier right now, and thus is exempt from State regulation. 
UPS, a carrier in the exact same business, is treated like a trucking 
company and is subject to State regulation. As my colleagues know, I 
have many concerns with airline deregulation, but leveling the playing 
field for these two giants is different. To address this inequity, the 
Senate-passed version of the bill included a provision that preempted 
State economic regulation of air carriers with trucks like Federal 
Express, motor carriers with aircraft like UPS, indirect air carriers, 
and a number of other large carriers that make use of air cargo 
services.
  After Senate passage, the House Public Works and Transportation 
Committee held hearings on this preemption provision, and the hearing 
testimony indicated that exempting a number of large carriers from 
State regulation could put nonexempted carriers at a competitive 
disadvantage. In light of this desire for fairness, the conference 
committee expanded the provision to preempt regulation of all 
intermodal and motor carriers engaged in the transportation of cargo. 
However, like others of my colleagues, I am concerned that new 
competition resulting from this action may adversely affect many small 
companies. I will be monitoring carefully the impact of this provision 
on those small companies.
  Finally, the House version of the bill sought to permit collective 
bargaining at the Washington area airports. Instead, the conferees 
decided to continue to review the issue through a study to look at how 
best to proceed with this issue as a result of concerns raised during 
the conference.
  I urge my colleagues to support passage of this conference report.
  Mr. DANFORTH. Mr. President, I am pleased we are moving forward on 
legislation that is vital not only to our aviation system, but our 
economy as a whole. The short-term airport reauthorization bill that 
was enacted on May 26 provided $800 million in Airport Improvement 
Program [AIP] funding. That authorization expired on June 30. Since 
that time no Federal money has gone to our Nation's airports. The 
conference report would bring the total authorization for fiscal year 
1994 to $2.105 billion. It also would authorize $2.161 billion for 
fiscal year 1995 and $2.214 billion for fiscal year 1996.
  Our Nation's aviation system needs expanded airport capacity. 
According to the FAA, there are currently 23 airports where flights are 
delayed by 20,000 hours or more annually. According to the FAA, this 
costs the airlines, on average, $32 million in delay costs at each 
airport. At the same time, passenger enplanements at the top 100 
airports are predicted to increase from 452 million in 1991 to 861 
million in 2005. This is a 90-percent increase. If nothing is done to 
increase system capacity, FAA projects that within 10 years 33 airports 
will experience more than 20,000 hours in annual delays. To meet these 
needs, the airports estimate that their capital development 
requirements will be $10 billion each year for the next 5 years. The 
current funding sources ($1.45 billion to $1.5 billion in AIP 
appropriations for fiscal year 1995, $3.5 billion in airport bonds, and 
$800 million in passenger facility charges) fall far short of the $10 
billion annual need. FAA has $8 billion in unfunded pending grant 
requests.
  A good example of the importance of AIP is Lambert Airport in St. 
Louis. Lambert currently experiences 50,000 hours of delays each year. 
Lambert projects that these delays will exceed 175,000 hours a year by 
2010 unless the airport is expanded. These delays currently cost the 
airlines $60 million a year and, without an expansion, these costs will 
grow to $200 million by 2010. In the next 2 years, Lambert is expected 
to seek an AIP funding commitment of $300 million over 10 years. 
Without these funds, Lambert officials will not be able to piece 
together the financing plan for the projected $1.8 billion expansion.
  Mr. President, another issue on which the conferees agreed was the 
question of the economic regulation of intrastate property movements by 
air carriers and motor carriers. The conference report recognizes that 
intrastate economic regulation of freight transportation no longer 
makes sense in a global economy with rapidly evolving transportation 
markets and practices such as just in time inventory control. 
Importantly, this legislation specifically recognizes the authority of 
States to regulate safety:

       Impose highway route controls or limitations based on the 
     size or weight of the motor vehicle or the hazardous nature 
     of the cargo, or the authority of a State to regulate motor 
     carriers with regard to minimum amounts of financial 
     responsibility relating to insurance requirements and self-
     insurance authorization.

  Mr. President, reauthorizing AIP is important. It also is important 
that this bill covers three aspects of the ongoing dispute between the 
airlines and the airports over the fees charged airlines. Examples of 
the types of fees that have created controversy include landing fees, 
as well as rental charges for gate space and baggage handling areas.
  The Secretary of Transportation would have 90 days to develop 
procedures and policies for reviewing airline-airport fee disputes. The 
procedures would have to include the following elements: First, a total 
review process period of 120 days; second, upon an airline's complaint, 
the Secretary would have to decide within 30 days whether to dismiss it 
or set it for hearing before an administrative Law Judge [ALJ]; third, 
within 60 days of the filing of the complaint, the ALJ would have to 
decide whether the fee was reasonable; fourth, the Secretary would have 
30 days to review the ALJ's decision; and fifth, the Department's 
determination would be reviewable by a court of appeals under a 
substantial evidence standard of review.
  Second, the bill contains a provision that would prevent an airport 
from locking out an airline over a fee dispute, provided the airline 
paid the disputed amount during DOT review. The airport would have to 
provide some assurance of repayment to an airline or airlines who 
prevail in the DOT rate review process. This assurance could take the 
form of a surety bond, letter of credit or other credit facility.
  Finally, the conference report deals with the issue of diverting 
airport revenue to non-airport purposes. Within 90 days of enactment of 
this legislation, the Secretary of Transportation would have to issue 
new policies and procedures designed to strengthen the prohibition on 
diversion. These new policies would provide airports clear guidelines 
on impermissible diversion.
  The Conference Report also includes a provision regarding revenue 
diversion that is legally permitted. Under this provision the Secretary 
must first make a finding that an airport which is legally permitted to 
divert is taking, in inflation adjusted terms, more off the airport 
than it did in the airport's first fiscal year ending after enactment. 
If this finding is made the increase in diversion will be a factor 
militating against distribution of discretionary funds to the airport. 
The conference report limited the application of this provision to 
those airports that are increasing the amounts they are diverting 
because the conferees recognized that these legal diversions represent 
long standing practices. Moreover, applying pressure to airports is 
unlikely to change the approach of fiscally strapped city governments. 
Lambert Field in St. Louis is one of the so-called grandfathered 
airports that has legally diverted a small percentage of airport 
revenues for many years. Given its fiscal problems, St. Louis will not 
change this practice regardless of changes we make in AIP funding 
criteria. Moreover, in determining how to weigh the factor of legal 
diversion it is important for the Secretary to consider the magnitude 
of the diversion. the Statement of Managers addresses this issue by 
stating, ``[T]he Secretary shall consider the amount being diverted by 
the airport operator compared to the amount being sought in 
discretionary grants in reviewing the grant application.'' Thus, the 
Secretary must consider the size of the diversion amount in comparison 
with the discretionary grant being sought.

  Mr. President, I would like to close by thanking Senators Hollings, 
Ford, and Pressler for the work they have done to bring this important 
legislation to the floor. I urge my colleagues to support it.


                         grandfathered airports

  Mr. KERRY. Will the chairman of the Aviation Subcommittee answer a 
few questions concerning the conference report to H.R. 2739?
  Mr. FORD. I would be delighted to.
  Mr. KERRY. I know that the chairman spent a great deal of time 
sorting through airport revenue diversion issues, and the conferees 
discussed the issue at length as well. Is the chairman's understanding 
that those airports that are permitted to divert revenues legally, are 
unaffected by the bill?
  Mr. FORD. That is correct. There is nothing in the bill that affects 
Massport's status. In fact, the conferees discussed this same problem 
with respect to St. Louis, which is in a similar situation to Massport. 
The conferees agreed to alter slightly the originally House provision 
language concerning legal revenue diversion as a factor in awarding 
discretionary grants. All of the conferees agreed that we were not 
taking away rights already granted in existing law.
  Mr. KERRY. I appreciate that explanation, as well as the Senator's 
efforts to make sure all of the airports are adequately funded.
  Mr. BRYAN. I commend the chairman of the Aviation Subcommittee for 
his outstanding work to resolve numerous contentious issues on this 
legislation which provides important funding for our Nation's airports.
  I would like to ask the chairman about one of the provisions in the 
legislation dealing with the ability of air carriers to provide gaming 
applications on in-flight interactive video systems. As the chairman 
knows, newly designed interactive video systems are being installed on 
foreign and domestic aircraft worldwide providing passengers a wide 
variety of in-flight entertainment options.
  Last year, we learned that foreign carriers had announced plans to 
provide games of chance on these entertainment systems. Because the 
market for international passengers is intensely competitive, numerous 
U.S. carriers likewise considered providing similar games.
  However, under an archaic law called the Johnson Act, U.S. air 
carriers--but not foreign carriers--are prohibited from providing 
gaming on their flights. The prohibition apparently applies to U.S. 
carriers even when the flight is in international waters and even if 
the flight is not taking off from or landing in the United States.
  A study has shown that U.S. flag carriers could lose hundreds of 
millions of dollars each year because--on those long international 
flights--some passengers may decide to fly on foreign-flag carriers 
rather than U.S. carriers in order to enjoy these additional 
entertainment options.
  To level the competitive playing field, U.S. carriers asked Congress 
last year to permit them to provide comparable gaming applications on 
in-flight video systems when their flights were over international 
waters. Earlier, Congress permitted U.S. cruise ships to provide gaming 
to compete with foreign cruise ships which likewise had a competitive 
advantage due to the operation of the Johnson Act.
  Congress recognized the potential adverse competitive implications 
for U.S. air carriers, but there were some concerns raised about the 
logistical operation of these gaming devices and whether their use 
would pose any threat to the safety of the aircraft or other 
passengers.
  I fully agree with those who have raised those concerns that these 
issues should be addressed before we permit these additional in-flight 
options. As a result, I agreed to the provisions in the conference 
report which provides for the Federal Aviation Administration to study 
the safety implications of the application of gaming devices on in-
flight interactive video systems. The safety study is very important. I 
believe the FAA should consider whether there is any reason that games 
of chance electronically will have any different effect on the 
operation of the aircraft than other electronic games such as Nintendo. 
The FAA should also consider whether allowing games of chances will 
affect passenger behavior more dramatically than the serving of alcohol 
on flights, or the prohibition on smoking. Frankly, I doubt they will. 
Finally, if the FAA determines that there are any valid safety issues, 
I urge them to include in its report to Congress how these issues could 
be addressed through the regulatory process.

  The conference report provision attempts to level the competitive 
playing field by prohibiting foreign air carriers from providing gaming 
applications, and provides that the Department of Transportation should 
study the competitive implications if foreign carriers are able to 
provide gaming while U.S. carriers are not.
  I also fear that the prohibition on foreign carriers may not be 
enforceable and that U.S. carriers will remain at a competitive 
disadvantage. For example, if the foreign carrier takes out the 
computer chip--which provides the gaming function--before it reaches 
U.S. airspace, I am uncertain how the U.S. could apply U.S. law against 
the carrier. In addition, it seems highly unlikely that the U.S. could 
enforce--or intends to try to enforce--such a provision when the flight 
does not even go to or from the United States. The DOT should consider 
the ability to enforce this law as part of its study.
  Mr. President, I hope the Senator from Kentucky will join me in 
urging the DOT and FAA to conduct these studies and report back to 
Congress expeditiously, and in no event later than the time frames in 
the legislation. I expect that the reports are likely to demonstrate 
that the foreign air carriers will remain at a competitive advantage, 
and any safety concerns can be addressed through the regulatory 
process. In any event, once we have the reports, we will be a better 
position to consider this issue at the beginning of next Congress.
  Mr. FORD. I thank my friend from Nevada for his comments. I join him 
in urging the DOT and FAA to complete the studies required in the 
legislation in a timely fashion. Once we have these studies, we will 
better be able to determine the competitive implications for U.S. 
carriers, and whether any valid safety concerns can be addressed 
through the regulatory process.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The Senator from Kentucky [Mr. Ford] suggests 
the absence of a quorum. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MITCHELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________