[House Report 106-167]
[From the U.S. Government Publishing Office]



106th Congress                                            Rept. 106-167
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================



 
        AVIATION INVESTMENT AND REFORM ACT FOR THE 21ST CENTURY

                                _______
                                

                  June 9, 1999.--Ordered to be printed

_______________________________________________________________________


 Mr. Shuster, from the Committee on Transportation and Infrastructure, 
                        submitted the following

                          SUPPLEMENTAL REPORT

                        [To accompany H.R. 1000]

    This supplemental report shows the cost estimate of the 
Congressional Budget Office with respect to the bill (H.R. 
1000), as reported, which was not included in part 1 of the 
report submitted by the Committee on Transportation and 
Infrastructure on May 28, 1999 (H. Rept. 106-167, pt. 1).
    This supplemental report is submitted in accordance with 
clause 3(a)(2) of Rule XIII of the Rules of the House of 
Representatives.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 28, 1999.
Hon. Bud Shuster,
Chairman, Committee on Transportation and Infrastructure, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1000, the Aviation 
Investment and Reform Act for the 21st Century.
    If you wish further details on this estimate, we will be 
pleased to provide them. The principal CBO staff contact for 
federal costs is Victoria Heid Hall. The staff contact for the 
private-sector impact is Jean Wooster, and the contact for the 
state and local impact is Lisa Cash Driskill.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

H.R. 1000--Aviation Investment and Reform Act for the 21st Century

    Summary: H.R. 1000 would authorize funding for programs of 
the Federal Aviation Administration (FAA) primarily for fiscal 
years 2000 through 2004. CBO estimates that implementing H.R. 
1000 would result in additional outlays totaling about $56 
billion over the 2000-2004 period. That total assumes 
appropriation action consistent with the bill's authorizations 
and the levels of new contract authority it provides for 
aviation programs. Outlays for the programs authorized by the 
bill would grow from an estimated $9.2 billion in 1999 to $14.8 
billion in 2004. We also estimate that enacting the bill would 
increase direct spending outlays by about $46 million over the 
same period. Revenues would decline by $35 million over the 
five-year period. Because H.R. 1000 would affect both direct 
spending and receipts, pay-as-you-go procedures would apply to 
the bill.
    The bill would provide an additional $7.1 billion in 
contract authority for the airport improvement program (AIP) 
over the 2000-2004 period (above the $2.4 billion a year 
assumed in the baseline), but providing this contract authority 
would not affect outlays from direct spending because AIP 
outlays are subject to appropriation action. (The increase in 
estimated AIP outlays is included in the discretionary total 
cited above.) H.R. 1000 also would increase direct spending 
authority for the Essential Air Service (EAS) program by $10 
million each year. We estimate that enacting that change would 
increase outlays by $46 million over the 2000-2004 period. 
Furthermore, the bill would allow the Secretary of 
Transportation to authorize certain airports to charge higher 
passenger facility fees and would expand a pilot program that 
provides for the innovative use of airport improvement grants 
to finance airport projects. The Joint Committee on Taxation 
(JCT) expects that these provisions would result in an increase 
in tax-exempt financing and a subsequent loss of federal 
revenue. JCT estimates that the revenue loss would be $35 
million over the 2000-2004 period and $142 million over the 
2000-2009 period.
    H.R. 1000 would take the Airport and Airway Trust Fund 
(AATF) off-budget and exempt AATF spending from the 
discretionary spending caps, pay-as-you-go procedures, and 
Congressional budget controls (including the budget resolution, 
committee spending allocations, and the reconciliation 
process). Title X would provide for adjusting AIP contract 
authority upward based on the difference between the amounts 
appropriated and the amounts authorized for FAA operations, 
facilities and equipment, and research and development. Any 
adjustments would begin in fiscal year 2001.
    H.R. 1000 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
the costs would not be significant and would not meet the 
threshold established by that act ($50 million in 1996, 
adjusted annually for inflation). Overall, the bill would 
provide significant benefits to airports operated by state and 
local governments. Section 4 of UMRA excludes from the 
application of that act any legislative provisions that would 
establish or enforce statutory rights prohibiting 
discrimination. CBO has determined that section 706 fits within 
that exclusion. Section 4 also excludes from the application of 
that act any legislative provisions that are necessary for the 
ratification or implementation of international treaty 
obligations. CBO has determined that section 710, which 
implements provisions of the Convention on International Civil 
Aviation, fits within that exclusion.
    H.R. 1000 would impose new private-sector mandates by 
requiring safety equipment for specific aircraft, imposing 
consumer and employee protection provisions, and imposing new 
requirements for commercial air tour operations over national 
parks. Those mandates would affect owners of fixed-wing 
aircraft, air carriers, end-users of aircraft parts, operators 
of commercial air tours, and owners and operators of cargo 
aircraft. CBO estimates that the total direct costs of the 
mandates would not exceed the annual threshold for private-
sector mandates ($100 million in 1996, adjusted for inflation).
    Description of the bill's major provisions: Title I would 
authorize the appropriation of $47.6 billion for FAA 
operations, facilities, and equipment for fiscal years 2000 
through 2004. Title I also would provide $19.2 billion in 
contract authority for the FAA's airport improvement program 
for fiscal years 2000 through 2004.
    Title I would allow the Secretary of Transportation to 
authorize certain airports to charge higher passenger facility 
fees than under current law. This title also would expand a 
pilot program that provides for the innovative use of airport 
improvement grants to finance airport projects. Title II would 
establish a federal credit program to assist commuter air 
carriers in purchasing regional jet aircraft. Title II also 
would increase the amount of direct spending authority for the 
EAS program and would authorize the use of appropriations to 
FAA operations for that program.
    Title III would provide that, of the amounts appropriated 
for FAA operations in fiscal year 2000, up to $1.5 million may 
be used to obtain contractual audit services to complete a 
report on FAA's costs and on the allocation of such costs among 
different FAA services and activities.
    Title IV would make the Death on the High Seas Act (DOHSA) 
inapplicable to aviation incidents, thereby broadening the 
circumstances under which relatives can seek compensation for 
the death of a family member in an aviation incident over the 
ocean.
    Title V would establish civil penalties for individuals who 
interfere with or jeopardize the safety of a cabin crew or 
other passengers.
    Title VI would provide whistleblower protection for 
employees of air carriers who notify authorities that their 
employer is violating a federal law relating to air carrier 
safety. The bill would set up a complaint and investigation 
process within the Department of Labor (DOL).
    Title VII would extend the war risk insurance program and 
prohibit the FAA from charging fees for certain services. This 
title would provide that, of the amounts appropriated for FAA 
operations in fiscal year 2000, $2 million may be used to 
eliminate a backlog of equal employment opportunity complaints 
at the Department of Transportation (DOT).
    Title VIII would make clear that the FAA has the authority 
to regulate aircraft overflights affecting public and tribal 
lands, and would establish a process for the FAA and the 
National Park Service (NPS) to coordinate the development and 
implementation of such regulations.
    Title IX would place receipts to and spending from the 
Airport and Airway Trust Fund (AATF) off-budget and exempt the 
fund from any general budget limitations. Titles IX and X would 
provide for periodic adjustments to the amounts authorized to 
be appropriated for the FAA based on estimated and actual 
deposits to the AATF and on appropriations action.
    Estimated cost to the Federal Government: Over the 2000-
2004 period, CBO estimates that implementing H.R. 1000 would 
result in additional discretionary outlays of about $56 
billion, additional direct spending outlays of $46 million, and 
a net loss of federal revenues of $35 million. The estimated 
budgetary impact of H.R. 100, excluding the potential impact of 
title X, is shown in the following table. The costs of this 
legislation fall primarily within budget function 400 
(transportation).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal years, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        1999      2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law:
    Budget Authority\1\.............................     7,654         0         0         0         0         0
    Estimated Outlays\2\............................     9,247     3,458     1,347       512       166        78
Proposed Changes\3\:
    Estimated Authorization Level...................         0     7,572     8,950     9,886    10,357    10,860
    Estimated Outlays...............................         0     6,020     9,653    12,095    13,687    14,710
Spending Under H.R. 1000\3\:
    Estimated Authorization Level \1\...............     7,654     7,572     8,950     9,886    10,357    10,860
    Estimated Outlays...............................     9,247     9,478    11,000    12,607    13,853    14,788

                                       DIRECT SPENDING--EXCLUDING TITLE X

Baseline Spending Under Current Law:
    Estimated Budget Authority\4\...................     2,410     2,460     2,460     2,460     2,460     2,460
    Estimated Outlays...............................         0        30        50        50        50        50
Proposed Changes:
    Estimated Budget Authority......................         0        75     1,600     1,700     1,850     1,950
    Estimated Outlays...............................         0         6        10        10        10        10
Spending Under H.R. 1000:
    Estimated Budget Authority\4\...................     2,410     2,535     4,060     4,160     4,310     4,410
    Estimated Outlays...............................         0        36        60        60        60        60

                                               CHANGES IN REVENUES

Estimated Revenues..................................         0        -1        -3        -6       -11       -14
----------------------------------------------------------------------------------------------------------------
\1\ The 1999 level is the amount appropriated for that year for FAA's operations account and facilities and
  equipment account.
\2\ Estimated outlays under current law are from amounts appropriated for 1999 and previous years for the FAA
  operations account and the facilities and equipment account, as well as the discretionary outlays from the AIP
  obligation limitations, assuming a full year of authority in 1999.
\3\ H.R. 1000 authorizes such sums as necessary for the FAA operations account and for the facilities and
  equipment account for fiscal year 2000. The table reflects a level for 2000 equal to the amounts provided in
  1999--that is, without any adjustment for anticipated inflation. Alternatively, if the 1999 levle is increased
  to adjust for inflation, the 2000 level would be $300 million higher, resulting in $300 million more in
  outlays over the 2000-2004 period.
\4\ Budget authority for AIP is provided as contract authority, a mandatory form of budget authority; however,
  outlays from AIP contract authority are subject to obligation limitations contained in appropriation acts and
  are therefore discretionary. CBO's baseline projections assume a full year budget authority will be provided
  for AIP for fiscal year 1999 and each subsequent year. The full-year total is 1.2 times the $2,050 million
  provided through August 6, 1999.

    The preceding table excludes the potential effects of title 
X, which would provide for adjustments to AIP funding, 
beginning in fiscal year 2001. The annual adjustments would be 
derived by comparing the amounts authorized for FAA operations, 
facilities and equipment, and research and development, and the 
amounts provided in appropriations acts for those purposes. If 
appropriations equal the authorized amounts, then there would 
be no adjustment in AIP contract authority. Any adjustment 
would constitute new direct spending authority because it would 
be triggered by title X; however, all outlays for AIP would 
still be subject to obligation limitations established in 
appropriation acts. Depending on the appropriation actions, 
this provision could result in additional AIP contract 
authority of up to $40 billion over the 2001-2004 period, as 
shown in the following table. (The maximum contract authority 
would result if no appropriations were provided for the 
accounts in question.)

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal years, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        1999      2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
                                     CHANGES IN DIRECT SPENDING--TITLE X \1\

Estimate Budget Authority...........................         0         0     8,950     9,886    10,357    10,868
Estimate Outlays....................................         0         0         0         0         0         0
----------------------------------------------------------------------------------------------------------------
\1\ The amounts shown are potential additions to AIP contract authority attributable to section 1001 of title X.

    Basis of estimate: Implementing H.R. 1000 would affect 
spending subject to appropriation, direct spending, and 
revenues. Estimates of outlays are based on historical spending 
patterns for the affected programs and on information provided 
by DOT and FAA staff.

Spending subject to appropriation

    For purposes of this estimate, CBO assumes that H.R. 1000 
will be enacted before the start of fiscal year 2000, and that 
the amounts authorized for aviation programs will be 
appropriated for each fiscal year.
    FAA Operations. H.R. 1000 would authorize the appropriation 
of such sums as necessary for FAA operations for fiscal year 
2000. The bill also provides that funds appropriated for FAA 
operations in fiscal year 2000 may be used for a number of new 
activities, including $2 million to eliminate a backlog of 
equal opportunity complaints at DOT, up to $1.5 million to 
study the use of recycled materials in aviation pavement, and 
up to $1.5 million to obtain contractual audit services to 
complete the Inspector General's report on the FAA's costs and 
cost allocations. In total, we estimate that the additional 
activities would require appropriations of $5 million for 2000. 
For fiscal years 2001 through 2004, the bill would authorize 
specific annual amounts totaling $28,553 million.
    In the absence of specific authorizations for FAA 
operations in 2000, CBO estimates the amounts of the 2000 
authorization based on the 1999 funding levels, with and 
without adjustments for inflation. The FAA received an 
appropriation of $5,567 million for operations in 1999. If that 
level is not adjusted for inflation between 1999 and 2000, CBO 
estimates that the funding level for fiscal year 2000 would be 
$5,572 million (including an additional $5 million for the new 
activities cited above). CBO estimates that appropriation of 
that amount in 2000 and the authorized levels specified in the 
bill for 2001 through 2004 would result in additional outlays 
for FAA operations totaling $33.3 billion over the 2000-2004 
period (excluding outlays from amounts appropriated in 1999 and 
prior years). Alternatively, if the Congress increased funding 
for operations in 2000 to account for inflation, we estimate 
that the funding level for that year would be $5,825 million. 
Combining that amount with the specified authorizations for 
2001 through 2004 would yield additional outlays of $33.5 
billion for FAA operations over the 2000-2004 period.
    H.R. 1000 also provides that funds appropriated for FAA 
operations may be used for certain activities and programs 
beginning in fiscal year 2001. Assuming that the Congress 
appropriates the amounts authorized in the bill for FAA 
operations for the years 2001 through 2004, we expect that 
earmarking amounts for the programs described below would not 
have any significant impact on outlays for FAA operations.
    Section 211 would establish a program to provide commuter 
air carriers with federal loans, loan guarantees, or lines of 
credit for the purchase of regional jet aircraft. The program 
is designed to improve service by jet aircraft to smaller 
airports and to markets that the Secretary of Transportation 
determines have insufficient air service. Section 212 provides 
that, from appropriations for FAA operations for each of fiscal 
years 2001 through 2004, such sums as necessary may be used to 
carry out the program, including administrative expenses. The 
Federal Credit Reform Act of 1990 requires appropriation of the 
subsidy costs and administrative costs for credit programs. The 
subsidy cost is the estimated long-term cost to the government 
of a direct loan or loan guarantee, calculated on a net present 
value basis and excluding administrative costs. Based on 
information from the FAA, CBO estimates that the subsidy 
appropriation necessary to implement this program would total 
about $80 million over the 2001-2004 period, and that outlays 
for this program would be $60 million over the five-year 
period. CBO estimates that administering the credit 
programwould cost about $11 million over the 2001-2004 period. The bill 
would permit the Secretary to charge fees to cover all costs to the 
federal government of making such loans and would allow the secretary 
to spend the fee receipts generated to administer the program. For 
purposes of this estimate, we assume the Secretary would not charge any 
fees.
    Section 202 provides that, of amounts appropriated for FAA 
operations beginning in fiscal year 2001, up to $15 million 
each year may be used to subsidize air carrier service to 
airports not receiving sufficient service as determined by the 
Secretary of Transportation. Such amounts would be in addition 
to the spending authorized under current law for the EAS 
program. CBO estimates that implementing this section would 
result in outlays of $54 million over the 2001-2004 period from 
the operations account, assuming appropriation of the necessary 
amounts.
    Section 131 would direct the Secretary of Transportation to 
establish a pilot program to contract for air traffic control 
services at certain towers that do not qualify for the current 
contract tower program. The pilot program would include a 
federal contribution to the costs of constructing control 
towers at up to two facilities. The section provides that, of 
the amounts appropriated for FAA operations beginning in fiscal 
year 2000, up to $6 million may be used each year for the pilot 
program. Because $6 million was earmarked for cost sharing for 
contract towers in the fiscal year 1999 appropriation for FAA 
operations, we estimate that enacting section 131 would not 
affect the outlay rate.
    FAA Air Navigation Facilities and Equipment. H.R. 1000 
would authorize the appropriation of such sums as necessary for 
air navigation facilities and equipment (F&E) in fiscal year 
2000 and specified amounts for fiscal years 2001 through 2004.
    FAA received an appropriation for $2,000 million for F&E in 
1999 (excluding $87 million that was provided in a separate 
appropriation specifically for addressing year 2000 computer 
problems). CBO estimates that appropriation of that amount in 
2000 and the authorized levels specified in the bill for 2001 
through 2004 would result in additional outlays for F&E 
totaling $10.3 billion over the 2000-2004 period (excluding 
outlays from amounts appropriated in 1999 and prior years). 
Alternatively, if the Congress increased F&E funding in 2000 to 
account for inflation, the estimated funding level for that 
year would be $2,047 million. Combining that amount with the 
specific authorizations for 2001 through 2004 would yield 
additional outlays of $10.4 billion for F&E over the 2000-2004 
period.
    FAA Airport Improvement Program. Title I would provide 
$2,410 million in contract authority (a mandatory form of 
budget authority) for the airport improvement program for 1999 
and a total of $19,175 million in contract authority over the 
2000-2004 period, as discussed below in the section on direct 
spending. That amount represents $7,125 million in contract 
authority above the amount assumed in CBO's March 1999 
baseline. For purposes of this estimate, we assume that the 
obligation limitations for AIP contained in annual 
appropriation acts for fiscal years 2000 through 2004 would 
equal the amounts of contract authority that would be provided 
in this bill.
    Other Provisions. Based on the current costs of operating a 
whistleblower protection program at the Department of Energy, 
CBO estimates that the administrative costs of operating the 
new DOL program provided in section 601 would be less than $1 
million a year.
    Based on information from the NPS and the FAA, CBO 
estimates that discretionary outlays to conduct planning and 
rulemaking for park overflights, complete air tour management 
plans (including environmental analyses), and monitor any 
overflight limits established in such plans would total $29 
million over the 2000-2009 period. This process is already 
underway, and we expect that these costs will be incurred 
within the next 10 years under current law, assuming 
appropriation of the estimated amounts. CBO estimates that the 
provisions of title VII dealing with park overflights would 
cause no significant change in FAA or NPS spending over the 
next five years. We estimate that operating the joint advisory 
group would cost the agencies a total of about $25,000 each 
year.
    H.R. 1000 contains several additional provisions that would 
required the FAA to conduct studies, complete reports, issue 
rulemakings, and develop test programs. CBO assumes that such 
costs would be funded from the authorizations provided in the 
bill for FAA operations, facilities, and equipment. In total, 
CBO estimates that these studies, rulemakings, and reports 
would cost about $1 million in fiscal year 2000.

Direct spending

    Relative to CBO's March 1999 baseline, enacting title I of 
the bill would provide an additional $7,125 million in contract 
authority (a mandatory form of budget authority) for the 
airport improvement program for fiscal years 1999 through 2004. 
It also would extend the authority of the Secretary of 
Transportation to incur obligations to make grants under that 
program.
    Under current law, $2,050 million in AIP contract authority 
for fiscal year 1999 is available for obligation until August 
6, 1999, equivalent to an annual rate of $2,410 million. Title 
I would bring the total contract authority for fiscal year 1999 
up to the baseline level of $2,410 million and would provide a 
total of $19,175 million in contract authority over the 2000-
2004 period. Consistent with the Budget Enforcement Act, CBO's 
baseline projectionsassume that a full year of contract 
authority ($2,410 million) will be provided for AIP in fiscal year 1999 
and each subsequent year. Therefore, relative to the baseline, enacting 
title I would not affect contract authority for 1999, and would 
increase contract authority by a total of $7,125 million over the 2000-
2004 period.
    Expenditures from AIP contract authority are governed by 
obligation limitations contained in annual appropriation acts 
and thus are categorized as discretionary outlays. For purposes 
of this estimate, we assume that appropriation acts for fiscal 
years 2000 through 2004 will set obligation limitations for AIP 
equal to the annual levels of contract authority provided in 
this bill (as discussed above).
    Section 202 would increase DOT's direct spending authority 
for the EAS program by $10 million each year, beginning in 
fiscal year 2000. In 1999, the program has $50 million of 
funding from amounts made available to FAA in discretionary 
appropriations, and it has a permanent, mandatory level of $50 
million a year for future years. Section 202 would increase 
that mandatory level to $60 million a year. We estimate that 
additional outlays from the increased authority would total 
$456 million over the 2000-2004 period. (This provision is in 
addition to the authorization for additional discretionary 
spending for EAS out of amounts appropriated for FAA 
operations.)
    Section 715 would prohibit the FAA from charging fees for 
certain FAA certification services pertaining to particular 
products manufactured outside the United States. Based on 
information from the FAA, CBO estimates that the forgone 
receipts would total about $1 million a year beginning in 
fiscal year 2000 and as much as $4 million a year in future 
years. Because the FAA has the authority to spend such fees, a 
reduction in such fee collections would also reduce spending; 
therefore, we estimate that this provision would have no 
significant net effect on direct spending over the 2000-2004 
period.
    Section 404 would amend title 49 of the U.S. Code so that 
the Death of the High Seas Act of 1920 (DOHSA) would not apply 
to aviation incidents. Under DOHSA, a family can only seek 
compensation if the relatives were financially dependent upon 
the deceased. By making DOHSA inapplicable to aviation 
incidents, section 404 would broaden the circumstances under 
which relatives can seek compensation for the death of a family 
member in an aviation incident over the ocean. It could also 
lead to larger awards. Based on information from DOT, CBO 
estimates that it is unlikely that enacting section 404 would 
have a significant impact on the federal budget. The provision 
could affect federal spending if the government becomes either 
a defendant or a plaintiff in a future civil action related to 
aviation. Since any additional compensation that might be owed 
by the federal government under such an action could be paid 
out of the Claims and Judgments Fund, the provision could 
affect direct spending. But CBO has no basis for estimating the 
likelihood or outcome of any such actions.
    Section 708 would extend the authorization for the FAA's 
aviation insurance program through December 31, 2004. Under 
current law, the aviation insurance program will end on August 
6, 1999. Enacting this provision could cause an increase in 
direct spending if new claims would result from extending the 
insurance program. Moreover, such a new spending could be very 
large, particularly if a claim exceeded the balance of the 
trust fund and the FAA had to seek a supplemental 
appropriation. But historical experience suggests that claims 
under this program are very rare; therefore, extending the 
aviation insurance program would probably have no significant 
impact on the federal budget over the next five years.

Revenues

    H.R. 1000 would authorize the Secretary of Transportation 
to allow certain airports to charge higher passenger facility 
fees than under current law. JCT expects that this provision 
would allow airports to generate more income from fees, which 
would be used to back additional tax-exempt debt. Such debt 
would result in a loss of federal revenue. JCT estimates a 
revenue loss of about $33 million over the 2000-2004 period and 
about $136 million over the 2000-2009 period.
    The bill also would expand a pilot program that provides 
for the use of airport improvement grants to implement 
innovative financing techniques for airport capital projects. 
These techniques include payment of interest, purchase of bond 
insurance, and other credit enhancements associated with 
airport bonds. While the first pilot program, enacted in 1996, 
included these provisions, the early use of the program was 
geared more toward changing federal/local matching ratios. In 
addition, the earlier authorization provided for no more than 
10 projects. This provision represents an expansion to 25 pilot 
projects. It is designed to leverage new investment financed by 
additional tax-exempt debt. JCT expects that this provision 
would lead to an increase in tax-exempt financing and a 
resulting loss of federal revenue. JCT estimates a loss of 
revenue of about $2 million over the 2000-2004 period and about 
$6 million over the 2000-2009 period.
    H.R. 1000 would authorize the FAA to impose a new civil 
penalty on individuals who interfere with the duties and 
responsibilities of the flight crew or cabin crew of a civil 
aircraft, or who pose an imminent threat to the safety of the 
aircraft. The bill also would impose civil penalties on air 
carriers that discriminate against handicapped individuals and 
on violators of certain other provisions. Based on information 
from the FAA, CBO estimates that the civil penalties in H.R. 
1000 would increase revenues, but that the effect is likely to 
be less than $500,000 annually.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending and receipts. The net 
changes in outlays and receipts that are subject to pay-as-you-
go procedures are shown in the following table. For the 
purposes of enforcing such procedures, only the effects in the 
current year, the budget year, and the succeeding four years 
are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal years, in millions of dollars--
                                                                 ---------------------------------------------------------------------------------------
                                                                   1999    2000    2001    2002    2003    2004    2005    2006    2007    2008    2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays..............................................       0       6      10      10      10      10      10      10      10      10      10
Changes in receipts.............................................       0      -1      -3      -6     -11     -14     -17     -19     -21     -24     -26
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Changes in the budgetary control of aviation spending: H.R. 
1000 would change the budgetary status of funding for aviation 
programs by placing the AATF off-budget and removing AATF 
funding from discretionary caps altogether. The bill also 
provides for periodic adjustments in FAA authorization levels 
based on AATF receipts and appropriation action.

Exempting AATF spending from budgetary control and enforcement 
        procedures

    Beginning in fiscal year 2001, title IX would take the 
Airport and Airway Trust Fund (AATF) off-budget and exempt 
trust fund spending from the discretionary spending caps, pay-
as-you-go procedures, and Congressional budget controls 
(including the budget resolutions, committee spending 
allocations, and reconciliation). By itself, taking the AATF 
off-budget would not change total spending of the federal 
government and would not affect spending or revenue estimates 
for Congressional scorekeeping purposes. However, because title 
IX would exempt AATF spending from the budgetary control and 
enforcement procedures that apply to most other programs, 
spending for air transportation would likely increase 
significantly. The amounts of potential increases are uncertain 
because they would depend upon future actions by both 
authorizing and appropriations committees.

Adjustments to FAA authorization and program funding

    Beginning in calendar year 2000, title IX would require the 
Secretaries of Transportation and the Treasury to estimate, by 
March 31 of each year, whether the unfunded aviation 
authorizations at the close of the subsequent fiscal year 
exceed net aviation receipts to be credited to the AATF during 
the fiscal year. If the unfunded authorities exceed estimated 
receipts, authorizations for appropriations from the trust fund 
would be reduced. It is unclear how this provision would be 
implemented, but enacting this provision could decrease the 
amount authorized to be appropriated from the AATF.
    Beginning with the President's budget submission for fiscal 
year 2003, title X would adjust the upcoming fiscal year's FAA 
authorizations based on the difference between estimated and 
actual receipts to the AATF in the most recently completed 
year. Title X provides that when the President submits a budget 
for a fiscal year, the Office of Management and Budget shall 
calculate and the budget shall report the extent to which the 
actual receipts (including interest) deposited to the AATF for 
the base year (that is, the most recently completed fiscal 
year) were greater or less than the estimated deposits 
specified in H.R. 1000 for the base year.
    If there is a difference between the estimated and actual 
deposits in the base year, then title X provides that the 
amounts authorized to be appropriated in the upcoming fiscal 
year for FAA operations, facilities and equipment, research and 
development, and airport improvement shall be adjusted 
proportionately such that the total adjustments equal the 
revenue difference.
    Estimated impact on State, local and tribal governments: 
Overall, H.R. 1000 would provide significant benefits to 
airports operated by state and local governments. It also would 
impose two small mandates on state governments, but CBO 
estimates the cost of complying with these mandates would not 
be significant and would not meet the threshold established by 
UMRA ($50 million in 1996, adjusted annually for inflation).

Mandates

    Section 401 of the bill would prohibit a state or local 
government from preventing people associated with disaster 
counseling services who are not licensed in that state from 
providing those services for up to 60 days after an aviation 
accident. Section 402 of the bill would expand a current 
preemption of state liability laws by limiting the liability of 
air carriers thatprovide information concerning flight 
reservations to the families of passengers involved in airline 
accidents. Air carriers are already provided immunity from state 
liability laws for providing passenger lists under these circumstances. 
Because neither mandate would require state or local governments to 
expend funds or to change their laws, CBO estimates that any costs 
associated with these mandates would be insignificant.

Other impacts

    H.R. 1000 would authorize $19.2 billion in contract 
authority for the AIP for fiscal years 2000 through 2004, an 
increase of more than $7 billion over CBO's March baseline for 
that period. Because the AIP provides grants to fund capital 
improvement and planning projects for more than 3,300 of the 
nation's state and locally operated commercial airports and 
general aviation facilities, those airports could realize 
significant benefits from this increase.
    The bill also would expand the uses and change the 
distribution of AIP funds. For instance, it would increase from 
$500,000 to $1.5 million the minimum amount of money going to 
each of the nation's 428 primary airports from the entitlement 
portion of the AIP. (Primary airports board more than 10,000 
passengers each year.) These funds are distributed based on the 
number of passengers boarding at an airport. The amount of 
money received per passenger would be significantly increased, 
and the current $22 million cap would be eliminated. The bill 
would also allow non-primary and reliever airports to receive 
up to $200,000 in entitlement funds per eligible airport. (Non-
primary airports board between 2,500 and 10,000 passengers each 
year; reliever airports are designated by the FAA to relieve 
congested primary airports.)
    Under this bill, eligible airports, under certain 
circumstances, would be able to increase passenger facility 
charges (PFCs) to $6 from the current $3 limit. Based on 
information from the General Accounting Office and the FAA, CBO 
estimates that if all airports currently charging PFCs chose to 
increase them, revenues would total about $475 million for 
every $1 increase in the fee. The revenue generated from 
increased PFCs could be used to leverage tax-exempt bonds for 
airport projects. The bill also would increase to 25 the number 
of airports eligible to participate in an innovative financing 
pilot program. Under this program, eligible airports could use 
AIP funds to leverage new investment financed by additional 
tax-exempt debt.
    Title II of the bill would deregulate the number and timing 
of takeoffs and landings (slots) at La Guardia Airport, Chicago 
O'Hare International Airport, and John F. Kennedy International 
Airport, effective March 1, 2000. Title II also would increase 
the number of slots available at Ronald Reagan Washington 
National Airport by six, subject to certain criteria. In 
general, as a condition of receiving money from the AIP, 
airports must agree to provide gate access, if available, to 
air carriers granted access to a slot. Based on information 
from the affected airports, CBO estimates that the increase in 
slots would have an insignificant impact on their budgets.
    Estimated impact on the private sector: H.R. 1000 would 
impose new mandates by requiring safety equipment for specific 
aircraft, imposing consumer and employee protection provisions, 
and imposing new requirements for commercial air tour 
operations over national parks. Those mandates would affect 
owners of fixed-wing aircraft, air carriers, end-users of 
aircraft parts, commercial air tour operators, and cargo 
aircraft owners and operators. CBO estimates that the total 
direct costs of the mandates would not exceed the annual 
threshold for private-sector mandates ($100 million in 1996, 
adjusted for inflation).

Owners of fixed-wing powered aircraft

    Section 510 would require the installation of emergency 
locator transmitters on certain types of fixed-wing, powered 
civil aircraft. It would do this by eliminating certain uses 
from the list of those currently excluded from that 
requirement. Most aircraft that would lose their exemption and 
currently do not have emergency locator transmitters are 
general aviation aircraft. According to information from the 
National Air Transportation Association, the trade association 
representing general aviation, the cost of acquiring and 
installing an emergency locator transmitter would range from 
$2,000 to $7,000 depending on the type of aircraft. CBO 
estimates that fewer than 5,000 aircraft would be affected, and 
that the cost of this mandate would be between $15 million and 
$30 million.

Air carriers

    Sections 402 and 403 would add new requirements to the 
plans to address the needs of families of passengers involved 
in aircraft accidents. Currently both domestic air carriers 
that hold a certificate of public convenience and necessity and 
foreign air carriers that use the United States as a point of 
embarkation, destination, or stopover are required to submit 
and comply with those plans. This bill would require that as 
part of those plans air carriers give assurance that they would 
provide adequate training to their employees and agents to meet 
the needs of survivors and family members following an 
accident. In addition, domestic air carriers would be required 
to provide assurance that, if requested by a passenger's 
family, theair carrier would inform them whether the 
passenger's name appeared on the preliminary manifest. Updated plans 
would have to be submitted to the Secretary of Transportation and the 
Chairman of the National Transportation Safety Board on or before the 
180th day following enactment.
    The bill does not specify what level of training would be 
adequate for air carriers to be able to provide required 
assurance. Based on information from representatives of air 
carriers, CBO concludes that the major domestic and foreign air 
carriers and some smaller carriers currently provide training 
to deal with the needs of survivors and family members 
following an accident. In addition, the domestic carriers 
provide flight reservation information upon request, as would 
be required under H.R. 1000. CBO estimates that the cost of 
meeting the additional requirements would be small.
    Section 601 would protect employees of air carriers or 
contractors or subcontractors if those employees provide air 
safety information to the U.S. government. Those firms would 
not be able to discharge or discriminate against such employees 
with respect to compensation, terms, conditions, or privileges 
of employment. Based on information provided by one of the 
major air carriers and the Occupational Safety and Health 
Administration, the agency that would enforce those provisions, 
CBO estimates that neither the air carriers nor their 
contractors would incur any direct costs in complying with this 
requirement.
    Section 727 would grant the FAA the authority to request 
from U.S. air carriers information about the stations located 
in the United States that they use to repair contract and 
noncontract aircraft and aviation components. CBO expects that 
the FAA would request such information. Based on information 
from the FAA and air carriers, CBO anticipates that the 
carriers would be able to provide the information easily 
because it would be readily available and that any costs of 
doing so would be negligible.

End users of life-limited aircraft parts

    Section 507 would require the safe disposition of parts 
with a limited useful life, once they are removed from an 
aircraft. The FAA would issue regulations providing five 
options for the disposition of such parts. The segregation of 
those parts to preclude their installation in aircraft is one 
option. Information from end users of such aircraft parts 
indicates that most currently segregate those parts before they 
reach the end of their useful life. CBO estimates that 
additional costs imposed by this mandate would be small since 
the end users would choose the most cost-effective method to 
safely dispose of such parts and most currently comply with the 
segregation option.

Commercial air tour operations

    Title VIII would require operators of commercial air tours 
to apply for authority from the FAA before conducting tours 
over national parks or tribal lands within or abutting a 
national park. The FAA, in cooperation with the NPS, would 
devise air tour management plans for every park where an air 
tour operator flies or seeks authority to fly. The management 
plans would affect all commercial air tour operations up to a 
half-mile outside each national park boundary. The plans could 
prohibit commercial air tour operations in whole or in part and 
could establish conditions for operation, such as maximum and 
minimum altitudes, the maximum number of flights, and time-of-
day restrictions. H.R. 1000 would not apply to air tour 
operations over the Grand Canyon or Alaska. Those operations 
would be covered by other regulations.
    CBO estimates that title VIII would impose no additional 
costs on the private sector beyond those that are likely to be 
imposed by FAA regulations under current law. CBO expects that 
the cost of applying to the FAA for authority to operate 
commercial air tours over national parks or tribal lands would 
be negligible.

Cargo aircraft owners and operators

    Section 501 would mandate that a collision avoidance system 
be installed on each cargo aircraft with a maximum certified 
takeoff weight in excess of 15,000 kilograms or more by 
December 31, 2002. Cargo industry representatives say they are 
currently developing a collision avoidance system using new 
technology and expect it to be installed in such cargo aircraft 
by the deadline, even if no legislation is enacted. CBO 
estimates that this mandate would impose no additional costs on 
owners and operators of cargo aircraft.
    Estimate prepared by: Federal Costs: Victoria Heid Hall, 
for FAA provisions and NPS overflights; Christinia Hawley 
Sadoti, for DOL penalties; and Hester Grippando, for FAA 
penalties.
    Impact on State, Local, and Tribal Governments: Lisa Cash 
Driskill.
    Impact on the Private Sector: Jean Wooster.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                                  
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