Ground To Tower- Legislative/Regulatory Update ACI-NA Airport Economics & Finance Conference May 5, 2010 Miami, FL Debby McElroy, Executive Vice President, Policy & External Affairs AIRPORTS COUNCIL INTERNATIONAL NORTH AMERICA 1775 K Street, NW, Suite 500 Washington, DC 20006 1
Washington, DC 2
Washington, DC Spring forecast: Incivility with a chance of rage (Politico 4/4/10) 3
Time Flies When You re Up for Re-election 4 months to do it all: April, May, June & July September = cleanup Supreme Court Nominee Agenda will likely change driven by Mid-Term elections 4
Congressional Agenda 2010 Fiscal Year 2011 Congressional Budget Financial Reform Jobs Bill(s) Tax Extenders Fiscal Year 2011 Appropriations Climate Change? Immigration Reform? 5
2010: The Year of the Job Job creation remains the administration s primary focus Department of Labor Secretary Hilda Solis March Job Report found: 15 million unemployed 6.5 million unemployed for more than 6 months Economy gained 162,000 jobs biggest jump in 3 years Unemployment rate remained at 9.7% for the third month 6
Obama s FY 2011 Budget DOT/FAA The Administration calls for level funding for the Airport Improvement Program (AIP) at $3.515 billion. The budget request includes $1.1 billion for NextGen, which is a 32% increase over the FY10 appropriated amount. The Small Community Air Service Development (SCASD) program is eliminated in the President s budget proposal. The proposal funds the Essential Air Service (EAS) program at $182 million, a $18 million decrease from FY10 enacted levels. The proposal includes $4 billion to create a National Infrastructure Innovation and Finance Fund which will provide resources to projects through grants, loans, or a blend of both and will effectively leverage non- Federal resources, including private capital. Includes $1 billion for high-speed rail. 7
AIP: Level Funding? Millions $3,550 $3,500 Grants-in-aid Administration Research ACRP SCASDP $8 $6 $0 $15 $15 $15 $19 $22 $27 $3,450 $87 $93 $100 $3,400 $3,350 $3,385 $3,378 $3,373 $3,300 FY2009 FY2010 FY2011 8
AMT American Recovery and Reinvestment Act Additional $1.1 Billion to AIP Waived local match requirements. AMT Relief Provision exempted AMT on new Private Activity Bonds issued in 2009 and 2010. Allowed refinancing of AMT debt issued between December 31, 2003 and January 1, 2009. Congressional Budget Office estimates ARRA raised employment by 1 million - 2 million at the end of 2009 9
Alternative Minimum Tax: American Recovery and Reinvestment Act The success of the ARRA provision has been recognized by DOT Secretary Ray LaHood and Deputy Secretary John Porcari at Congressional oversight hearings. This provision is helping us leverage our funding to get the most out of Recovery Act resources. Porcari 87 AMT transactions totally $11.6 Billion with $9 Billion benefitting from AMT relief as of April 8, 2010. 10
ARRA AMT Success Stories McCarran - $2.3B new terminal $550M Bonds saved 1600 jobs Sacramento - $1B terminal renovation project -$400M Bonds saved 1200 jobs John Wayne - $543M Capital Improvement Program $223M Bonds 2005-2013 6,670 jobs will be created: More than half of those created in 09-10 11
AMT: Continuing Push for Permanent Relief HR 4849 Small Business and Infrastructure Jobs Tax bill passed House with one year extension (thru 2011) of ARRA s AMT relief provisions. Airport success stories were used by Cong. Neal and Cong. Mike Thompson (D-CA) in Committee and on the floor to sell the issue. HR 4849 pending before Senate Finance Committee. 12
AMT: Push for Permanent Relief Continuing to work with Rep. Neal (D-MA) and Sen. Kerry (D-MA) to gain permanent relief. Airport success stories can be used in markup and floor debate ACI-NA sent a letter jointly with the student loan association and the seaports to Congressional leaders asking for a permanent extension and full refinancing. Need additional cosponsors: HR 425 (Ryan R-WI) S 138 (Bingaman (D-NM), Lincoln (D-AR), Snowe (R-ME)- all members of Finance Committee) We continue to collect information 13
FAA Reauthorization: How d We Get Here 2003: Vision 100 Century Aviation Reauthorization Act (P.L. 108-176) 9/27/07: House passes FAA Reauthorization Act 9/29/07: P.L. 110-92 extension to 11/16/07 9/30/07: Vision 100 expires 11/13/07: P.L. 110-116 extension to 12/14/07 12/14/07: P.L. 110-137: extension to 12/21/07 12/21/07: P.L. 110-149: extension to 12/31/07 12/21/07: P.L. 110-161 extension to 02/29/08 14
How d We Get Here cont. 2/28/08: P.L. 110-190: extension to 6/30/08 06/30/08: P.L. 110-253: extension to 9/30/08 09/30/08: P.L. 110-330: extension to 3/31/09 03/30/09: P.L. 111-12: extension to 9/30/09 10/01/09: P.L. 111-69: extension to 12/31/09 12/16/09: P.L. 111-116: extension to 3/31/10 3/31/10: P.L. 111-153: extension to 4/30/10 4/30/10: Extension thru 07/03/10 15
FAA Reauthorization = Jobs According to the FAA, the bill will allow billions to be spent on upgrading and expanding airports throughout the country. It is expected to create 125,000 jobs annually (Aviation Subcommittee Chairman Jerry Costello) The DOT has estimated that every billion dollars spent in AIP funding creates or sustains more than 20,000 jobs throughout the US economy. (Finance Committee Chairman Max Baucus It is estimated that if every airport currently with a $4.50 PFC adopted the $2.50 increase included in the House bill, 40,000 direct jobs would be created nationwide. (ACI-NA letter) 16
FAA HR 1586 House vs. Senate House Senate PFC $7.00 $4.50 & pilot project NPRM on ARFF No ARFF Language Fed-Ex/UPS No provision Antitrust immunity/ No provision airline alliances Inspection of foreign Strengthen oversight repair stations 17
ARFF ACRP: Compliance with NFPA proposal was estimated to cost over $2.8 billion in initial costs and over $1.3 billion annual thereafter in increased O&M Costs don t include response time standards or rapid response area beyond the ends of airport runways. May 4, 2010 coalition letter opposing any changes to ARFF coordinated by ACI-NA and signed by 11 aviation and municipal associations including NACo, NLC and US Chamber of Commerce. 18
FAA Reauthorization Where do we go from here? Numerous objections to naming conferees and officially moving to a formal conference. House T&I and Senate Commerce staff are working through informal negotiations on low hanging fruit. Members will be left to deal with the contentious items. Important for airports to continue to push for multi-year bill, jobs created through PFC increase and AIP funding. Urge no change in ARFF standards. 19
Questions? Debby McElroy (202) 861-8090 dmcelroy@aci-na.org 20